For years, I didn't participate in an HSA for one simple reason — my health insurance plan wasn't compatible with one. Of course, the upside there was that I had a nice, low deductible to cover. But once my family changed insurance and moved over a high-deductible plan, we immediately signed up for an HSA and have been making contributions ever since.

That said, there's one key rule I employ with my HSA. And you may want to adopt a similar strategy to get the most benefit during retirement.

Don't touch the money

An HSA isn't a retirement account per se. You can take an HSA withdrawal at any time to cover a qualified medical expense, like a copay for seeing the doctor. Since expenses like that are apt to arise frequently during your working years, you may have plenty of chances to spend your HSA ahead of retirement.

But the best strategy for managing your HSA is actually to leave that money alone until retirement. That way, you can more easily cover your healthcare bills at a time when they might otherwise constitute a huge chunk of your income.

Fidelity estimates that the typical 65-year-old retiring in 2023 is looking at $157,500 in healthcare costs throughout retirement. If you're living on Social Security and modest withdrawals from a 401(k) or IRA, medical care could be a huge burden. But if you leave your HSA untapped during your working years and carry that money into retirement, you can spend less of your Social Security benefits and savings on healthcare — and buy yourself a lot more financial breathing room.

Tax benefits like no other account

What makes an HSA so wonderful is that it's loaded with tax benefits. If you're saving for retirement in a traditional IRA or 401(k), you may be familiar with the idea of contributions going in tax-free. And if you have a Roth account, you're benefiting from tax-free growth and are eligible for tax-free withdrawals in retirement.

HSAs combine all of these benefits into a single account. Your contributions can lower your near-term tax bill, money that's not used can be invested tax-free, and withdrawals aren't taxed as long as they're spent on qualified healthcare expenses. It's a triple win.

So if your health insurance plan renders you eligible for an HSA, don't just bemoan your higher deductible. Instead, take advantage of the opportunity to enjoy a world of tax savings.

But also, don't touch your HSA during your working years unless you absolutely need to. You're much better off having dedicated funds to cover healthcare costs in retirement so you can spend your remaining income elsewhere.

On my end, I'm bummed that I got a later start to funding an HSA, but so it goes. Remember, though, that HSA requirements tend to change from year to year. So if you're not eligible to contribute to an HSA right now, check the rules next year, and every year, to ensure that you're not passing up a great opportunity.

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