Definition of 'HSA Custodian'
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.
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