Are SDHSAs the same as SDIRAs?

[Account Closed]

Some SDIRA custodians also offer SDHSAs.  On the funding side, IRAs and HSAs are different animals. Retirement account (401Ks, IRAs) contributions must be made from earned income. HSAs, on the other hand, require only a high-deductible health care plan where the deductible is high enough to qualify the plan for an HSA. No earned income is required to contribute to an HSA.

Unlike an FSA (which you lose every year if you don't use it), an HSA balance can be carried forward into retirement (but no more contributions can be made to the HSA once enrolled in Medicare). There are also differences in how distributions from these two types of accounts are taxed. When used for eligible medical expenses, for example, HSA distributions are tax free. Otherwise, non-medical HSA distributions are treated like Traditional IRA distributions in that they are taxed at the earned income rate.

I'm not a tax specialist. A good primer on tax-advantaged accounts (IRAs, HSAs) can be found on the Mad FIentist site (https://www.biggerpockets.com/forums/846/topics/563476-ep-18-accessing-retirement-funds-before-59-1-2-w-the-mad-fientist, https://www.madfientist.com/ultimate-retirement-account/).

My background: I worked for many years as an independent contractor through a temporary help agency. The agency had a 401K plan I contributed to regularly, but I was on my own for health insurance. I chose an HDHC plan and an HSA when they became available in the 2000s. Most HSA custodians offer savings accounts and some offer an investment option, usually mutual funds (https://www.nytimes.com/2017/07/07/your-money/health-savings-accounts-morningstar.html, https://20somethingfinance.com/best-hsa-account/). I'm starting to see reference to SDHSAs and want to learn how they are the same and different from SDIRAs.

[Carl Fischer]

HSA are tax deductible contributions going in and tax free coming out if used for medical expenses. They invest just like IRAs into real estate notes precious metals etc.