A Health Savings Account (HSA) is a tax-advantaged savings account available to individuals enrolled in a high-deductible health plan (HDHP). Contributions made to an HSA are tax-deductible, and the funds can be withdrawn tax-free as long as they are used for qualified medical expenses. This makes HSAs a valuable tool for those with HDHPs, as they can help offset the higher out-of-pocket costs associated with such plans.

In addition to its immediate benefits, an HSA can also serve as a long-term investment vehicle, as the money in the account can be invested in stocks, bonds, or mutual funds, growing tax-free over time. After age 65, HSA funds can be used for non-medical expenses without penalty, though taxes will apply. This makes it a flexible and beneficial savings tool not only for medical costs but also for retirement planning.