A health savings account (HSA) can deliver triple tax benefits. Is one right for you?

A health savings account (HSA) can deliver triple tax benefits. Is one right for you?

An HSA has 3 tax benefits, not found in any other account type. First, contributions are tax-deductible. Second, there is no taxation on funds while they are growing in the account, and third, distributions taken for qualified medical expenses are tax-free. That’s a sweet deal! An HSA essentially offers you the tax-deduction and tax-deferral of a 401K combined with the tax-free withdrawal on earnings (used for qualified expenses) of a Roth IRA. Like these accounts, there are eligibility rules for who is qualified to contribute and what you can spend the money on. Similarly, you can invest your HSA in one of Azzad’s investment products. Here’s how an HSA works: each year, you decide how much you want to contribute to your account (up to the IRS maximum limits). You can use the funds in your account to pay for eligible medical expenses not covered by your plan (note: insurance premiums aren’t eligible). Unlike a Flexible Spending Account (FSA), your balance rolls over from year to year, so you never have to worry about losing your savings. Plus, once you reach age 65, you can withdraw from your HSA for any reason. Of course, you’ll pay taxes on distributions used

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