Open enrollment is right around the corner and if you’re enrolled in a High-Deductible Health Plan (HDHP), now is the time to take full advantage of your Health Savings Account (HSA).
At Phoenix Financial Group, we often see clients missing out on the long-term benefits of their HSA. Whether you’re focused on tax savings, healthcare planning, or retirement investing, this guide will help you unlock the full potential of your account before open enrollment begins.
What Is an HSA?
An HSA is a tax-advantaged savings account designed for individuals with an HDHP. It allows you to:
- ✅ Contribute pre-tax dollars
- ✅ Grow your funds tax-free
- ✅ Withdraw funds tax-free for qualified medical expenses
Unlike FSAs, unused funds roll over year to year and even into retirement.
2025 HSA Contribution Limits
The IRS HSA limits for 2025 are:
- $4,300 for individuals
- $8,550 for families
- +$1,000 catch-up contribution if you’re age 55 or older
Maxing out your contributions is a smart move especially if you want to reduce your taxable income and plan ahead for medical costs.
Use It or Let It Grow
Many people think of HSAs as short-term tools for paying out-of-pocket medical expenses. But here’s the smarter play:
- If you can afford to cover current healthcare expenses from your regular cash flow…
- Let your HSA funds grow untouched and use them later in retirement—when healthcare costs typically rise.
This strategy can turn your HSA into a powerful retirement asset.
Investing with Your HSA
Once your HSA balance reaches a certain minimum (usually $1,000–$2,000, depending on the provider), you may be eligible to invest in mutual funds or ETFs.
That means your HSA can:
- Grow like a Roth IRA (tax-free)
- Be used anytime for qualified expenses
- Serve as a long-term healthcare safety net
If you’re not already investing through your HSA, check with your provider or talk to your financial advisor.
Plan Ahead for Open Enrollment
Don’t wait until the last minute to revisit your benefits. Use the time before open enrollment to:
- 📋 Review your 2024 healthcare expenses
- 🔄 Assess whether an HDHP and HSA are still the right fit
- 📈 Adjust your 2025 contributions to match your goals
- 📞 Schedule a consultation with your financial advisor
Early preparation ensures you’re taking full advantage of all the tax benefits and savings opportunities an HSA offers.
📅 Ready to Optimize Your HSA Strategy?
The Health Savings Account is one of the most flexible, tax-efficient, and underutilized tools available to individuals and families.
💬 Have questions about how to get more from your HSA before open enrollment?
Contact Phoenix Financial Group today to schedule a personalized review and make your benefits work harder for you in 2025 and beyond.