Which of the following accurately describes the purpose of a health savings account?

The purpose of a health savings account (HSA) is to cover medical expenses tax-free, making it an effective financial tool for individuals seeking to manage healthcare costs. HSAs allow account holders to deposit pre-tax dollars, which can then be used for qualified medical expenses such as deductibles, copayments, and other types of out-of-pocket healthcare costs. This tax advantage is a key feature, as it not only reduces taxable income when contributions are made but also allows for tax-free withdrawals when used for eligible medical expenses.

Others options focus on different financial purposes that do not align with the primary function of an HSA. For example, investing in real estate is not a use of HSA funds, and while HSAs can be used in some cases to pay for health insurance premiums, that is not their main purpose. Additionally, while HSAs can be part of retirement planning, their primary benefit is not specifically to accumulate funds for retirement, but rather to help cover current medical expenses tax-free. Overall, the correct answer highlights the essential function of HSAs in promoting tax-efficient management of healthcare expenses.