Can You Save Too Much in a Health Savings Account?

In addition to generous tax benefits, HSAs also provide a lot of flexibility. [Morningstar](?utm_source=eloqua&utm_medium=email&utm_campaign=newsletter_improvingfinances&utm_content=48216&elqTrackId=0de182c2a04344a98a10448a1d343aeb&elq=79718577e6f5438ba9545f87604a9c48&elqaid=48216&elqat=1&elqCampaignId=23882) [Improving Your Finances] Improving Your Finances with [Christine Benz]( [Christine Benz] Financial- and tax-planning professionals love health savings accounts because of their prodigious tax benefits, but is it possible that you could oversave in one? It’s not likely. People who have been using their HSAs to invest—and using non-HSA assets to cover healthcare expenses—can always pull from their HSAs for non-health-care expenses later. Moreover, [once you hit age 65, HSA withdrawals for non-healthcare expenses are taxed like traditional IRA or 401(k) withdrawals](. In a worst-case scenario, HSAs are wonderful accounts for a charity to inherit from you. I wrote about the ins and outs of HSAs for supersavers in [this week’s column](. I’ll be happily maxing out my HSA for the foreseeable future. I’ve also been learning a lot from our team’s work on rating robo-advisors, which have grown by leaps and bounds over the past decade. [Amy Arnott and Gabe Denis discussed some of their core findings in this interview with Ivanna Hampton]( and Amy delved into the differences among robo-advisors’ recommendations in [this article](. She found significant variations in robos’ advice (as well as some oddball commonalities). If you’re trying to make sense of this year’s odd market, I’d urge you to check out [Danny Noonan’s compendium of charts]( summarizing key trends for stocks and bonds. Higher interest rates may eventually push the economy into a downturn, with implications for corporate earnings and stock prices. But Danny’s graphs show that stock investors are enjoying a pretty solid year despite the headwind of higher rates, especially if they have exposure to growth stocks. Speaking of higher interest rates, I loved my colleague [Madeline Hume’s in-depth unpacking of her own decision not to buy a home](. If only more people brought such rigor to the home-buying process! I’ve been a mostly happy homeowner for nearly 30 years. But as my home has become a smaller share of my net worth, I’ve concluded that the decision about whether to buy or rent is more about lifestyle and community than it is about making an investment gain. With warm regards, Christine Benz [Can You Save Too Much in a Health Savings Account?]( Even savers whose assets exceed their healthcare expenses have some escape hatches. [Read More]( Share: [facebook]( [twitter]( [linkedin]( ADVERTISEMENT [media]( [media] [What Happens to Your HSA in Retirement?]( HSA-owning retirees need to think about asset allocation, sequence of withdrawals, and beneficiary designations. [Read More]( [3 of the Best Robo-Advisors—and One of the Worst]( These providers stood out for low fees, quality of available investments, and more. [Watch Now]( [Not All Robo-Advisors Are Created Equal]( Investors should do their own research, as recommended portfolios can vary—a lot. [Read More]( [12 Must-See Charts for Investors in September 2023]( The charts and themes that tell the current story in markets and investing. [Read More]( [Why I Don’t Own a Home]( A firsthand look at the home truths faced by first-time buyers. [Read More]( [Martin Lau: Revisiting the Case for Investing in Chinese Stocks]( A longtime fund manager reflects on the state of China’s economy and market and what the future might hold. [Listen Now]( [4 Dangerous Assumptions That Could Hurt Your Retirement Plan]( By the time retirement savers realize the error of their ways, it may be too late. [Read More]( Listen Now Get the latest investing insights and market updates with [Morningstar’s podcasts]( available on your iPhone, iPad, Android, PC, or smart speaker. Stay connected: [twitter]( [facebook]( [linkedin]( [instagram]( [YouTube]( [Apple News]( [View online]( | [See all newsletters]( | [Share your feedback]( [Unsubscribe]( from this newsletter. Or update your [email preferences](. © 2023 Morningstar, Inc. All Rights Reserved. 22 W. Washington St. Chicago, IL 60602