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The first thing you should do when saving for retirement is to meet your employer’s 401k match, but after that most experts disagree about the next course of action because of the HSA rules. Some experts say that a Health Savings Account should be where you contribute retirement funds after meeting your 401k match. And others still say that Individual Retirement Accounts are the way to go.

So which account should be a retirement savings priority? Let’s break down the advantages of both accounts so that you can decide.

HSA Rules Makes Health Savings Accounts Awesome

A Health Savings Account is the only option that offers triple tax benefits. Account holders get a tax break for their contributions, their HSA investments grow tax free, and distributions for qualified medical expenses are also tax free. By contrast, an IRA can only give you a tax break for either the contribution or the distribution.

As a result of the tax free distributions on qualified medical expenses, an HSA is the only account with tax benefits that you could use before retirement. Thanks to the HSA rules, these accounts act like a shadow traditional IRA because once you turn 65, you take out non-medical distributions without having to pay any penalty. In this scenario, you’d just pay taxes on distributions — which is similar to a traditional IRA.

Speaking of a traditional IRA, account holders have required distributions beginning at age 70 1/2. HSAs have no required distributions.

IRAs Have Many Layers To Them

Whether you have a Traditional IRA or a Roth IRA, there are many benefits to taxpayers. IRAs allow single taxpayers to contribute over $2,000 more than HSAs (that’s $5,500 compared to $3,400) per year. And IRAs are more universal because HSA rules stipulate that account holders be enrolled in a high deductible health plan. The only requirement there is for an IRA is that the individual makes at least $5,500 in income.

In addition, some HSAs are riddled with crazy fees. And, you have to keep track of medical expenses to get the tax benefit on distributions.

The big advantage of IRAs is that there are robo-advisors who provide investment options. One recommended option for IRAs includes M1 Finance — where you’re first $1,000 invested are free!

Click here to check out M1 Finance and their special free investing option.

Between the HSA and IRA, which do you prefer? Let us know in the comments.