Can I Invest in Real Estate with my Health Saving Account (HSA)?

If you were surprised when you found out you can invest in real estate using your IRA, you'll be even more surprised to learn you can invest using your HSA too!

What is a Health Savings Account (HSA)?

A Health Savings Account (HSA) allows people enrolled in a high-deductible health plan (HDHP) to make pre-tax contributions to pay for qualified medical expenses.

HSA Benefits

A benefit of using an HSA is that contributions are made pre-tax (tax-deductible), grow tax free, and can be withdrawn tax free, if used for qualified medical expenses. 

If you are over 65 years of age, you can use the funds in your HSA for non-medical purposes, but you will be subject to ordinary income tax much like a traditional IRA. However, if you withdraw funds from your HSA for non-medical purposes and you are under the age of 65, you will be subject to additional penalties. 

Why Consider Your HSA as an Investment Vehicle?

HSA funds roll over each year if they are not used. If you contribute to these accounts year after year but hardly use them, you may find yourself with a sizable balance. Most HSAs are held traditional bank accounts and these funds may only be earning 2% or less a year.

Also, unlike IRA's and 401(k)s, contributions to HSAs are not subject to the 7.65% FICA tax (a.k.a. payroll tax) for Social Security and Medicare. Right there you are saving 7.65% on your money by contributing to an HSA. 

If you looking to lower your overall tax bill, then contributing to an HSA is yet another tool in your toolbox. 

How Can I Invest in Real Estate Using my HSA?

Much like a Self-Directed IRA, you can open a Self-Directed HSA and invest in a wide range of investments, including real estate. 


Babylon Property Group, LLC provides private investment opportunities for qualified investors looking to diversify their portfolio outside of traditional assets found in typical 401(k) and IRA plans. For a FREE consultation, please fill out our investor questionnaire, or contact us directly by phone at (631) 253-1609 or email at tcastelli@babylonpropertygroup.com.