HSA Custodian

Search Dictionary

Definition of 'HSA Custodian'

A health savings account (HSA) is a tax-advantaged account that allows individuals to save money for future medical expenses. HSAs are offered by many employers, and individuals can also open an HSA on their own.

An HSA custodian is a financial institution that holds an HSA account. The custodian is responsible for managing the account, including depositing contributions, investing the funds, and paying out distributions.

There are a few things to keep in mind when choosing an HSA custodian. First, you want to make sure that the custodian is reputable and has a good track record. Second, you want to make sure that the custodian offers a variety of investment options. Third, you want to make sure that the custodian has a low cost structure.

Once you have chosen an HSA custodian, you can open an account and start contributing money. You can contribute up to $3,600 in 2023 ($4,500 if you're 55 or older). Your employer may also make contributions to your HSA, up to $3,600 in 2023.

The money in your HSA can be used to pay for qualified medical expenses. Qualified medical expenses include doctor's visits, hospital bills, prescription drugs, and other health-related costs. You can also use your HSA to pay for long-term care insurance premiums.

Any money that you contribute to your HSA is tax-deductible. And any earnings on your HSA investments are tax-free. However, you will have to pay income taxes on any distributions that you take from your HSA, unless you use the money to pay for qualified medical expenses.

HSAs are a great way to save for future medical expenses. They offer a number of tax advantages, and they can help you to pay for your medical costs in a more affordable way.

Here are some additional things to know about HSAs:

* You can only have one HSA at a time.
* You can roll over your HSA from one custodian to another.
* You can use your HSA funds to pay for your spouse's or dependent children's medical expenses.
* You can use your HSA funds to pay for over-the-counter medications.
* You can use your HSA funds to pay for health insurance premiums if you are unemployed or retired.

If you have any questions about HSAs, you should consult with a financial advisor.

Do you have a trading or investing definition for our dictionary? Click the Create Definition link to add your own definition. You will earn 150 bonus reputation points for each definition that is accepted.

Is this definition wrong? Let us know by posting to the forum and we will correct it.