Ever wondered if you’re using your health savings account the right way? That’s normal! More and more people have HSAs nowadays, but lots of people don’t take advantage of their full power.

Here are some fundamental keys to success with an HSA.

1. Contribute

This is the first key to success with an HSA. Grow your health savings! Contribute monthly, especially if your employer is not putting any funds in. A smart way to contribute is to just think about how much you’re saving on premiums, and then put those savings in your HSA. Remember, HSA dollars are your dollars. They don’t expire, and they will roll over year after year.

2. Have enough to cover your max-out-of-pocket

The ideal situation is to have enough money in your HSA to cover any out-of-pocket medical costs that arise. That way, you never have worry where the money is going to come from if a large medical expense comes up. Start by contributing enough to cover your deductible.

Remember, you don’t always have to use your HSA funds for every medical expense. Sometimes it might be smart to pay out-of-pocket for smaller medical expenses, so that your HSA reserve can continue to grow to protect you against major expenses.

3. Utilize tax advantages

Don’t forget to report your HSA contributions on your tax return. Say you make $65,000 per year. That means your federal income tax will be 22% (if you’re the head of a household, not single). Say you put away $5,000 in your HSA. You don’t have to pay taxes on that $5,000. That’s a savings of $1,100 (22% of $5,000)!

HSA contribution limits for 2020 are $3,550 for self-only coverage and $7,100 for families. Those tax savings can add up over the years.

4. Invest your HSA dollars

Many with HSAs aren’t aware that HSA dollars can be invested. As you build up your HSA account, investing a portion of that money can be a smart way to grow your balance even faster.

In fact, some recommend thinking of your HSA as a retirement account. Ask your HSA provider how to invest your HSA funds.