HSA a primary retirement account?

[Corporate Thug]

I'm hearing a lot of chatter of people moving and I was thinking about exploring the option.

I don't have a great understanding of how HSAs work but my main questions are as follows:

(1) How can this be a retirement account when the funds are supposed to be used for health related costs? For example, assume I drop 6k per year in a HSA -- in 20 years there is a 120k in there...don't I have to show 120k in expenses to be able to withdraw that money?

(2) Are HSA savings account or investment accounts? In other words, will the $ grow at any rate?

 

[sixone]

http://www.hsainsights.com/hsa-and-hdhp-basics.html

 

[FoBoT]

my HSA is with Chase
when you get a certain $ in it, you can then put a portion into different funds, similar to 401(k)

not sure about the other part, but i know if you don't use it, you keep it, unlike the Flex medical savings where you have to use it or lose it

 

[darkxshade]

1. You can't drop 6k into an HSA, the limit this year is 3100(edit: I guess you can do 6k if you meant for family coverage)

2. Both, you have to keep a minimum in the HSA account which is a savings account and anything over that min you can invest in mutual funds


It's like a 401k but for medical expenses and is like a retirement account because after 65, you can withdraw it like a 401k and pay your regular tax rate. The reason why it's better than 401k is because you don't get taxed on it if you spend it for medical expenses[eg tax free going in, tax free coming out]. The loophole right now is that you can pay cash/out of pocket for your medical expenses, get a receipt and save it so that the balance in your HSA can earn more capital gains. Then when you retire[or whenever you please], you can withdraw the amount you spent on medical expenses tax free.