A Roth IRA and an HSA both grow and (for medical costs) withdraw tax-free — but only the HSA gives you an upfront tax deduction. This tool shows the dollar value of that extra edge over time.
Sample input: Annual contribution ($, pre-tax): 4400, Your marginal tax rate (%): 30, Years until you spend it: 30, Expected annual return (%): 7
HSA advantage over Roth: 124688 (Large HSA advantage)
For dollars earmarked for medical costs, the HSA beats a Roth IRA by about $124,688 over 30 years — the future value of the upfront tax deduction a Roth never gets (HSA grows $415,627 vs Roth $290,939). This assumes the HSA is spent on qualified medical expenses.
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Both grow tax-free and (for the HSA, on medical costs) withdraw tax-free, so the only difference is the front end: the HSA contribution is tax-deductible while the Roth is funded with after-tax dollars. The HSA advantage equals the future value of that deduction, per the triple-tax-advantage rules in IRS Publication 969.
Yes. The HSA only matches the Roth's tax-free withdrawal when used for qualified medical expenses. After 65, a non-medical HSA withdrawal is taxed as ordinary income (like a Traditional IRA), which can erase this edge — so earmark the HSA for healthcare.
Not necessarily. The HSA is best for medical-earmarked dollars, but it requires an HSA-eligible high-deductible plan and has a lower limit. A common order is: capture any 401(k) match, then max the HSA, then fund a Roth IRA. Diversifying across account types is sensible.
This model compares tax-free-vs-tax-free withdrawals, so future rates do not change the medical-use result. They matter only if you take non-medical HSA withdrawals after 65, which are taxed at your then-current ordinary rate (IRS Publication 969).