HSA Investing and Savings for Children

Hello,

HSA Accounts

You may have a Health Savings Account (HSA) through your employer but only using 2 out of its 3 tax benefits.

A study on 15.2 million HSA accounts representing over $50 billion in assets found that only 18% of HSA owners invest their funds.1

HSA Tax Benefits 1. Contributions are tax-deductible 2. Funds can be withdrawn tax free for health related expenses 3. Tax free growth on the investments inside of an HSA.

Login to your HSA to see if your funds are in cash or if they are invested.

Tip: If you have the cash, you can pay medical bills out of pocket, invest the HSA for the long term, and reimburse yourself tax-free for past expenses. There is no deadline to reimburse yourself. Meaning you can pull out funds well into the future for past medical expenses.

Trump Account Update

In a previous newsletter, I compared the various savings options you have for children.

In summary, the main 3 are: 1. 529: Specific for college 2. Brokerage account in parent's name: Greatest flexibility 3. Trump Account: Long term retirement plan for your child

In the past, we have prioritized the 529 & Brokerage Account.

Whether you should have a Trump account as a strategy for your child is outside of the scope of this newsletter, but you should at least do the following:

1. Sign up for the seed deposit of $1,000 for children born in 2025 - 2028 2. Confirm if your child is eligible for Michael Dell's donation of $250 per child (for those who are ages 2 - 10 living in a zip code with the median income under $150,000 per year).

*Note the income threshold of $150,000 is NOT your income. It is based on the zip code you live in. If you are unsure, you can check your eligibility here. Nearly 80% of all zip codes should be under the threshold.