A health savings account or HSA is considered triple tax advantaged. Today I want to talk to you a little bit about what those advantages are and why you might want to consider an HSA in your retirement portfolio. But first I wanted to introduce myself. My name is Warren Burger. I'm the owner of luminary financial advisors. We help people that are approaching retirement or recently retired create a retirement plan that has an emphasis on tax savings in retirement. But before we talk about these three powerful tax advantages, I just want to give you a little bit of an overview of what an HSA is. And HSA is an account that's used for funding medical needs in retirement. So there are a few caveats, some rules that apply to an HSA. And I think that they're worth going over first.
So number one is in order to have an HSA, you need to have a high deductible health plan. So in 2022, that means if you're an individual you need to have a deductible of $1,400 a year in your health plan. If you're, if you're a family that's $2,800 as you're deductible, while those deductibles may seem high it may make sense when you look at all the parameters that are evolved the amount that you're contributing the amount of co-payments you have things like that. When you start to do the math, it may work for you, especially if you're someone that doesn't spend a lot of time using your healthcare coverage. So there is a maximum contribution in 2022, the maximum contribution for an individual is $3,650 for a family it's $7,300. And if you're 55 and over there's a thousand dollars a year catch up which would make that maximum $4,650.
Now, here are the tax advantages that come with the HSA when you're contributing to the HSA it's tax deductible. So there's the, there's the first real tax advantage. Then as your HSA grows in the investment accounts that they have it grows tax free. And if in retirement you use those funds for the prescribed medical purposes they come out tax free. So ultimately you have a vehicle that may provide for funding in your retirement with completely tax free money. And while it is designed for medical purposes one strategy that we've employed with some clients is looking back for years. So having them pay out of pocket for a number of years before retirement for some of the medical costs that are associated, and that ranges from medical equipment to aspirin allergy medicine, medication sunscreen. So there are a lot of different categories that qualifies medical expenses as it pertains to the HSA. And so what happens is before retirement, you can pay out of pocket for a lot of these things, keep those receipts totally legal. And
Then when you retire, you can present those receipts from previous years. And now you're in a position where you may be able to use your HSA as a a tax free retirement income distribution vehicle using those receipts from previous years. So it's just another use case for the HSA. All in all the HSA is probably one of the most, if not the most powerful retirement vehicles that we have available to us, it might not be the right solution for everyone, but I think it's certainly worth taking a look. If you are in a position where you might be able to take advantage, I've included a link below to the HSA store. Now, HSA store literally sells things that are approved for the that qualify as medical expenses for the HSA. I'm not necessarily sending you there to go shopping, but it's a good place to go, just to get a sense of some of the things that are covered as medical expenses.
And I think you'll find that there are quite a few things that you might not have expected on that. I hope this has been helpful for you. If it has please subscribe to the YouTube page or like this video. And if you want another view on your personal finances, feel free to schedule a complimentary call with me. I have a link below as well. We can discuss what your personal situation is, and at least we can get you pointed in the right direction. Thanks for watching the video. And I hope to see you next time.