A Health Savings Account is designed for medical costs, but its rules make it one of the most overlooked retirement tools available to the self-employed.
- Contributions are pre-tax
- Growth inside the account is tax-free
- Withdrawals for medical expenses are tax-free at any age
- After 65, non-medical withdrawals are taxed like a traditional IRA — no penalty
“I treat my HSA like a second retirement account now — I pay medical costs out of pocket when I can and let the HSA balance keep growing untouched.”
It requires a high-deductible health plan to qualify, which isn’t the right trade-off for everyone. But for freelancers who already have one, it’s an easy account to be under-using.
