A health savings account (HSA) can provide a triple tax break: your contributions are tax-deductible (or pre-tax if through your employer). The money grows tax-deferred, and you can withdraw it tax-free for eligible medical expenses at any time. And when you turn age 65. You can withdraw the money tax-free for even more expenses.

You have to stop making HSA contributions when you enroll in Medicare Part A or Part B, but some people who are still working for a large employer delay signing up for Medicare so they can contribute to an HSA. To be eligible to make HSA contributions in 2020, your policy must have a medical insurance deductible of at least $1,400 if you have self-only coverage or $2,800 for family coverage.

But even after you have to stop making new HSA contributions, you can keep the money growing in the account for future expenses. You usually have to pay taxes and a 20 percent penalty if you withdraw HSA money for anything other than qualified medical expenses, but the penalty goes away at 65. At that point, you just have to pay taxes on nonmedical withdrawals.

And you have more ways to avoid the taxes. After you turn 65 you can also take tax-free HSA withdrawals to pay premiums for Medicare Part B, Part D prescription drug coverage, and Medicare Advantage (but not Medigap) for yourself and your spouse, as long as the HSA account owner is 65 or older. Always check with your tax advisor. For other types of medical savings accounts click here or here

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