What is the primary purpose of a health savings account (HSA)?

A health savings account (HSA) is specifically designed to enable individuals to save and accumulate funds for qualified medical expenses. The primary purpose of an HSA is to provide a tax-advantaged way for individuals to set aside money that can be used for eligible medical costs, which may include doctor's visits, prescription medications, and other healthcare-related expenses.

Contributions to HSAs are tax-deductible, and the funds can grow tax-free. Additionally, withdrawals for qualified medical expenses are not taxed, making HSAs an effective tool for managing healthcare costs. This focus on healthcare-related savings differentiates HSAs from other savings options, such as retirement accounts, which are aimed at different financial needs.