What is the primary purpose of a Health Savings Account (HSA)?

The primary purpose of a Health Savings Account (HSA) is to pay for medical costs. HSAs are designed to allow individuals to save money, tax-free, to cover qualifying medical expenses. Contributions made to an HSA can be deducted from taxable income, providing an immediate tax benefit. The funds in an HSA can be used for a variety of healthcare expenses, including deductibles, copayments, co-insurance, and some other health-related costs that are not covered by insurance. This makes HSAs a valuable tool for managing healthcare expenses and enhancing financial security related to medical needs.

While HSAs might offer benefits related to retirement (as funds can be saved and invested for future health-related expenses even in retirement), their fundamental purpose remains focused on directly supporting the payment of medical costs.