Use this HSA Calculator to Predict the Future Value of Your Health Savings Account

This post is for those of us of who are now or who will be covered under a high deductibe health insurance plan that is combined with a Health Savings Account or HSA.  Even if you are upset that you are in such a plan (don’t you like to be a healthcare consumer?), you should still read on.

I have previously written about how I am using my HSA as a super-Roth type investment vehicle.  More recently, www.hsainsights.com has made available an HSA Future Value Calculator.  This free online tool allows you to enter your age (and age of your spouse if you have a family health plan, your HSA contributions level, and an estimated internal rate of return.  The calculator will then calculate a future value, adjusted for different levels of HSA funds usage for actual health care costs.

Although there are lots of unknowns in using a calculator like this, it does let you experiment with different rates of return for your HSA funds.  If your HSA provider offers a reasonable selection of investment options and provides historical data for those options, the calculator will assist you in making an appropriate selection.

I know that lots of people have concerns about Health Savings Accounts because of the high insurance deductibles.  However, Mr. ToughMoneyLove is a big fan of HSA plans because they allow a relatively healthy person to make deposits into the HSA account tax free, grow those funds, and then withdraw funds from the account, also tax free.   This beats even a Roth IRA.

I think if you give this calculator a try, the investment value of your HSA account will be highlighted for you.  Give it a try.  Like the HSA or not, you need to make the best of it.

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