Health Savings Account (HSA)

Self-Directed Health Savings Account

A health savings account (HSA) is designed to help individuals and families save for health care costs. Withdrawals for qualified medical expenses are tax free at any age. They can be used for expenses such as prescriptions, eye care, dental care, and some over-the-counter medications.

With a self-directed HSA, you can invest in alternative assets, which have the potential to produce higher returns than traditional stocks and bonds or mutual funds. As the plan owner, you make those investment choices based on your own knowledge and expertise.


  • Contributions are tax-deductible
  • Contributions and earnings accumulate year-to-year
  • Distributions for qualified medical expenses are tax free
  • If you change health plans, you do not lose the funds
  • Penalty-free withdrawals for any reason at age 65
  • Alternative assets in self-directed HSAs add critical diversity and can grow the earnings in the account often at a faster pace than traditional assets do




  • You must be enrolled in a high-deductible health plan (HDHP)
  • You can’t have other health coverage
  • You can’t be enrolled in Medicare
  • You are not claimed as a dependent on someone else’s tax return

Contribution Limits of a Self-Directed Health Savings Account

Health Savings AccountS (HSA) 2019 2020
Individual $3,500 $3,550
Family $7,000 $7,100
Catch-Up Contribution (if over age 55) $1,000 $1,000