When you're ready to start saving for retirement, it's easy to focus on your 401(k) or IRA. But there's another account you should prioritize, too—your health savings account. These accounts offer three unique tax benefits, along with the opportunity for long-term growth.

While it's easy to spend health savings account money on your current medical expenses, you may be missing out on the account’s future potential. Before swiping your card for medical expenses, consider these long-term benefits.

Max out your health savings accounts every year for tax breaks

As you start earning more money, you may be looking for ways to reduce your family’s taxable income. One way to achieve this is through tax deductions. There are several ways to score a tax deduction, including annual contributions to your health savings account.

This is considered an “above-the-line” deduction—not to be confused with “itemized deductions”—which happen later on your return. Above-the-line deductions are more popular because you subtract them from your gross income. But if you choose the standard deduction—and most people do, according to the Urban-Brookings Tax Policy Center—you won’t be able to claim any itemized deductions.

With an eligible high-deductible health insurance plan, you can contribute up to $3,550 per year as an individual or $7,100 with a family plan in 2020. In 2021, you can contribute up to $3,600 per year as an individual or $7,200 for families. You can deduct the full amount on your tax return every year, regardless of how much money your family makes.

Opportunity to invest and grow the balance

Another benefit of health savings accounts is portability. You can take the entire balance with you when you change jobs, which gives you the ability to grow your balance every year. Some health savings account providers allow you to invest the balance so you can grow your funds even more.

You can invest and grow the money tax-free and make withdrawals anytime for qualified medical expenses. As you may imagine, you could grow a sizable balance over time if you decide not to spend the money within your HSA.

For example, let's say you open a health savings account for the first time at 30-years-old. You can use our health savings account calculator to see how much money you may have after 30 years if you don’t spend any money from it,

If you contribute and invest the maximum amount every year, you could have $199,270 after 30 years, assuming a 4% return. Best of all, you won't owe income taxes on the earnings—or withdrawals—once you need to spend it. Income taxes on investments varies by state, so be sure to check your state laws or consult a tax professional to identify the amount of savings you’ll have.

Investing vs. spending your health savings account money

When you have a high-deductible health plan, it may feel like a visit to the doctor’s office can overwhelm you. One quick visit to the doctor or small procedure can easily turn into large medical bills—often for hundreds of dollars or more.

Not everyone can afford to pay out-of-pocket for expenses like these. But if there is any wiggle room in your budget, it could pay off to leave your health savings account untouched.

By maxing out your contributions every year and investing the balance, you could have a solid nest egg by retirement. Because let’s face it—there’s nothing cheap about healthcare in retirement. The average couple may need $285,000 for healthcare and medical expenses alone, according to Fidelity, so you may be relieved when the money is there.