Health savings a count question

Tax exempt going in
Tax exempt gains if invested
Tax exempt when pulling out for medical expenses

MAX IT

I’m a big fan of HSAs. I think they can help with rising health insurance premiums as people may opt to use HSA savings for routine expenditures as opposed to putting everything on insurance. This could make the health insurance market more like the car insurance market, where only major items are actually being covered by insurance. This puts more responsibility on consumers, causes them to exercise more discretion in consuming health care, and gives them access to an attractive investment tool in its own right.

Many call HSAs a “stealth 401(k).” Once you’ve maxed out your 401(k), you can then max out your HSA and invest it much the same way. If you need to use the funds for medical purposes, you’ll be able to do so tax free. But if you don’t use them all for medical purposes, once you’re 65, you can use the HSA funds for any reason and only pay taxes on your distributions (no penalties). This is why people view them as a “stealth 401(k).”

What if you have a wife and several kids is this still a better way to go rather than a PPO plan? It just seems like I would quickly drain any of the savings i put in a HSA and wouldn't have much to invest. I know they have high deductables too compared to my PPO plan.

I would say to crunch the numbers based on one year when you had a lot of medical costs and compare. You get lower premiums but also have a higher deductible also. You have also got to take into consideration that insurance will 100% after your deductible, so it is a pretty complicated equation.