Wish I Knew About Roth IRAs and HSAs Sooner (Because Same)

May 8

Someone on Reddit said this and it hit hard: “I wish I understood what a Roth IRA was earlier and opened one as soon as possible. I may’ve had to draw from it during college… but that would’ve been fine. Same goes for an HSA — I withdrew everything and got slapped with penalties and taxes.”

If you’re Gen Z or Gen Alpha and just starting to stack cash, this is your sign: learn these two accounts now, use them early, and avoid the “I could’ve had six figures saved by now” moment in 10 years.

MoneyMode Tip: If you can open a Roth IRA or HSA in your teens or early 20s, you’re basically unlocking cheat codes for future you.

First: What’s a Roth IRA?

A Roth IRA is a retirement account you fund with after-tax dollars. That means you pay taxes now, but when you withdraw the money later — it’s tax-free. Even the gains. Even if it 10x’d.

Why It’s Perfect for College Students:

Lower income = lower tax rate = more favorable now
You can withdraw contributions anytime (not earnings)
You’re building long-term savings while your friends are buying concert tickets on Klarna

You can open one with Fidelity or most online brokerages in like 15 minutes.

🛡️

New to Roth IRAs?
Start here: Roth IRA 2025 Guide →

Can You Pull Money Out of a Roth IRA?

Yes — and this is what Reddit was talking about. If you put in $2,000, and it grows to $2,400, you can always take out the $2,000 you contributed without penalty. The earnings ($400) have to stay put unless you’re 59½ or meet exceptions.

MoneyMode Tip: Use a Roth IRA like a “no-touch unless necessary” emergency fund. You can access contributions if you absolutely need to — but it keeps growing when you don’t.

Now Let’s Talk HSAs (Health Savings Accounts)

If you're on a high-deductible health plan (usually through an employer), you might qualify for an HSA. This account lets you:

Contribute pre-tax money
Invest the funds
Withdraw for qualified medical expenses tax-free

Sounds great, right? Here's the kicker: if you withdraw for non-medical stuff before age 65, you pay a 20% penalty + income tax. Reddit user said they took out $2,000 and got wrecked with a 10% fee at the time. That penalty is now double.

But Here’s the Power Move:

If you don’t use it, your HSA turns into a retirement account at 65 — penalty-free. It’s like a secret Roth + medical fund hybrid.

MoneyMode Tip: Treat your HSA like an ultra-niche Roth IRA. Invest the money, don’t touch it, and you’ll have tax-free withdrawals for healthcare and retirement later.

Real Talk: Why This Isn’t Taught in School

Because no one profits off you knowing how to play the long game. But we do. Every Gen Z/Alpha investor who opens a Roth IRA or HSA early and leaves it alone is stacking wealth while everyone else is wondering how to make rent next decade.

This isn’t “just retirement.” It’s freedom. Options. Security. And it doesn’t take much to start.

💸

Only got $100?
Here’s how to start investing anyway: Invest with $100 →

Final Thoughts

You don’t need to max out every account right away. You don’t even need to contribute monthly if things are tight. But opening a Roth IRA and HSA as early as possible gives you flexibility and serious long-term gains. Don’t wait until you regret not knowing what they are.

Open the account. Contribute what you can. Let time do the work.

TL;DR:

Roth IRAs = tax-free retirement money (contributions are always accessible)
HSAs = triple tax-free if used for healthcare (but penalized if misused)
Reddit regret: didn’t open early, withdrew early, lost big
Start small, stay consistent, and don’t touch gains
Fidelity is a solid option for both Roth IRAs and HSA investing

Samantha Stultz