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How do I model an HSA account?
How do I model an HSA account?

This article describes how to add HSA accounts

Nancy Gates avatar
Written by Nancy Gates
Updated over a week ago

Health Savings Accounts (HSA) are popular ways to save tax-advantaged funds for medical expenses. HSAs can also help you save for retirement by deferring the account's use for several years while covering short-term medical expenses with other income. Follow these steps to set up an HSA account:

Create HSA Account(s)

Step 1: Go to My Plan > Accounts and Assets

Step 2: Open the Savings section

Step 3: Click on "Add an account +"

Step 4: Indicate that this is an HSA

Step 5: Specify if this is your account or your spouse's account

Step 6: Either link your account or enter details manually (we will be doing Manual Entry for this exercise)

Step 7: Enter an account name and balance. Enter a balance of $0 if you have yet to fund the account

Step 8: If your HSA is invested, enter optimistic and pessimistic growth rates. If your HSA is liquid, enter "0%" for growth rates

Step 9: Determine whether you will make contributions to the account. If yes, head over to Money Flows.


HSA Assumptions

HSAs have contribution limits for individuals and families (contribution limits are not modeled in the tool).

HSAs must be used for medical expenses, excluding premiums to avoid income tax obligations (spending restrictions are not modeled in the tool).

While HSAs are excluded from Federal Tax obligations, some states tax HSA contributions (state-specific taxes on contributions are modeled in the tool while state-specific taxes on growth within these accounts are not).

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