The HSA Is a Better Roth Than Your Roth

Most people open an HSA because it sounds like a smart way to handle doctor bills.

But the real opportunity shows up when you stop thinking of it as “health spending money” and start treating it like a long-term asset that happens to come with a very specific set of tax rules.

For 2026, the HSA contribution limits are $4,400 (self-only) and $8,750 (family), plus the $1,000 catch-up at age 55+.

That’s a meaningful amount of space to build a quietly powerful bucket.

Here’s the strategy that turns that space into something more than just another account.

The Receipts Vault Strategy

In short…

Pay today’s qualified medical costs out of pocket, keep the HSA invested, and save the receipts so you can reimburse yourself tax-free later.

You’re essentially converting ordinary medical expenses into a future pool of tax-free withdrawals.

Why this can beat a Roth

A Roth is straightforward: pay taxes now, and qualified withdrawals can be tax-free later.

With an HSA, the best-case outcome is even better for medical spending:

• You may get a tax break when the money goes in

• The account can grow without annual taxes

• And qualified withdrawals can come out tax-free

That third piece is what most people underuse because they spend the HSA immediately instead of letting it compound.

The rule that makes the Vault work

The “Vault” only works if your documentation is clean and your timing is correct.

Two non-negotiables:

1. The expense must be a qualified medical expense.

2. You need records that support what you withdrew and why.

In plain terms: if you want tax-free reimbursements later, you need to be able to prove the expense happened, what it was for, and that it wasn’t reimbursed elsewhere.

Why federal families have a built-in advantage

If you’re enrolled in a federal HDHP, you may have features that make this strategy easier to execute than in many private plans:

1) Your plan may contribute to the HSA automatically

Some federal HDHPs include a pass-through contribution into your HSA. If you avoid spending it, that’s a steady drip of investable dollars many people never capitalize on.

2) You can coordinate with the right version of an FSA

This is where a lot of federal households accidentally step on a rake.

If you want an FSA alongside an HSA, the arrangement that tends to fit is a limited-purpose option (often dental/vision).

That keeps the HSA eligible and lets you cover predictable expenses without touching the HSA’s long-term compounding.

How to set up your Receipts Vault without turning it into a second job

Step 1: Choose your 2026 contribution target

Start with the ceiling:

• $4,400 self-only

• $8,750 family

Then subtract any expected plan pass-through amounts so you don’t accidentally overfund.

If you’re 55+, decide whether you’ll use the additional $1,000 catch-up.

Step 2: Stop swiping the HSA card by default

When a qualified bill shows up, pay it from checking (or a rewards card you pay off in full) so the HSA stays untouched and invested.

Step 3: Save “audit-ready” proof as you go

You don’t need a complex system. You need a reliable one.

Keep:

• Receipt or provider invoice

• Date of service

• Amount

• Who it was for (you/spouse/dependent)

• An EOB when you have it

Step 4: Track it in one simple place

A clean setup looks like this:

• a folder named “HSA Vault” (cloud or local)

• a basic spreadsheet with: date / provider / amount / person / reimbursed? / file name

Once a month (or once a quarter), drop in new receipts and update the sheet.

A 5-minute action list for this week

• Confirm whether your HDHP includes an HSA pass-through contribution.

• Set your 2026 contribution target using $4,400 / $8,750 as your cap.

• If you use FSAFEDS, ensure your election doesn’t conflict with HSA eligibility.

• Create your Vault folder + a simple tracking sheet.

• Next medical bill: pay it out of pocket, file the receipt, and keep the HSA invested.

Best,
— FWR