If you want to build tax-free wealth, I've got a great strategy for you using health savings accounts.

First, health savings accounts are triple tax preference and that means that number one, you get a tax deduction for the amount of the contribution you make each year. Number two, that account's going to grow tax deferred. And number three, whenever you make a withdrawal from a health savings account and use it for qualified medical expenses, it's tax free to you.

So. there's just a few requirements for you to be able to have and fund a health savings account. The number one requirement is you have to have a high deductible health insurance plan. This can be through your employer or it can be an individual policy, but you do have to participate in a high deductible health plan to be able to add money to your health savings account. However, once you move into Medicare, then unfortunately you're able to contribute anymore. You can still use the money in it, you just can't add new money. 

Also, there are maximum limits that you can add every year. It varies but increases a little bit every year. Right now, an individual could add not quite $4,000 a year and a family could add almost $8,000 a year. And then if you're age 55 or over, you get a thousand-dollar extra increment.

A big benefit of health savings account deductions is there are no income limits. So, for example in a Roth IRA, once you make so much income, you can't even add money to that Roth IRA at all. With a health savings account, there are no income limits. This can be a great tax saver for high income earners, but there's three tricks I want to tell you about that can help you maximize that tax-free wealth that you're building in your health savings account. 

The first one is don't spend it. I think that's the number one thing I see. Folks will come into my office and they're saving into a health savings account, get in the tax deduction, but then they're spending it every year on current medical expenses. This is not a use it or lose it account, so you can leave it alone and let it grow over time. 

This leads me to the second step, which is invest it. So, within the health savings account, you actually will have investment choices, so don't leave it in cash, or don't leave it in a money market. Choose a good mutual fund to invest it in so that you can get the growth in those funds over time as you continue to contribute to it each year.

And importantly, you're going to use it for retirement medical expenses. We know medical health expenses are your biggest expense in retirement. So, by being intentional in your building this tax-free pool of dollars to use for medical expenses, you're set when you get there. Also, you can use it for such a wide variety of things. You can even use it to reimburse yourself for Medicare Part B and Part D premiums, so as you can see, there is no danger that you won't find uses for it in retirement. 

Tax-free wealth matters to all of us because, I mean, let's face it, taxes are going up in the future and anything you can do to help build tax-free wealth will send you on your way to fantastic retirement.