> Put your money into an HSA rather than an FSA. It's a free extra retirement account.
You often can't really pick. To contribute to an HSA, you need to have a high deductible health plan (there have been some pushes in Congress to change this). Whether or not an HDHP makes sense for you really depends on your personal circumstances. Furthermore, you can not contribute to an HSA if you also have a healthcare FSA at the same time (there are other things called "Limited Purpose FSAs", which only cover dental and vision, that can work with an HSA).
That said, if you can contribute to an HSA, they are absolutely the best tax deal around, as they are one of the only vehicles where (a) you can put money into the account tax free, (b) any growth is tax free, and most HSAs allow you to invest, and (c) if you spend the money on an exempt purpose (something healthcare related), then that's also tax free.
You often can't really pick. To contribute to an HSA, you need to have a high deductible health plan (there have been some pushes in Congress to change this). Whether or not an HDHP makes sense for you really depends on your personal circumstances. Furthermore, you can not contribute to an HSA if you also have a healthcare FSA at the same time (there are other things called "Limited Purpose FSAs", which only cover dental and vision, that can work with an HSA).
That said, if you can contribute to an HSA, they are absolutely the best tax deal around, as they are one of the only vehicles where (a) you can put money into the account tax free, (b) any growth is tax free, and most HSAs allow you to invest, and (c) if you spend the money on an exempt purpose (something healthcare related), then that's also tax free.