Make savings do double duty

Tax-deferred savings accounts that can be used for more than one purpose may help you juggle competing financial goals when there's only so much money to go around.

41. Add an HSA. Enrollment in health savings accounts (HSAs), which can be used to cover medical bills and save for retirement, has shot up nearly 70% over the past two years. Reason: They can be a great deal, as long as you're comfortable with a high-deductible health plan.

You can contribute up to $6,450 pretax this year; one in five employers offers a match (another 47% are considering adding a match within five years). Funds you don't use for health care roll over into future years and grow tax-free.

42. Open a Roth. Hardpressed to fund separate investment accounts for college and retirement? Save for both goals simultaneously in a Roth IRA, suggests Troy Onink, CEO of Strategee, a college-planning service.

With a Roth you can make penalty-free withdrawals before age 59½ if used to pay higher-education bills. Onink notes, "With a Roth you give yourself flexibility." You and your spouse can each contribute up to $5,000 a year, as long as your combined income is less than $178,000.

Watch: How 401(k) fees eat away at your retirement savings

43. Fund a 529. Able to sock away even more for college? Open a 529 plan, which allows money you save for tuition bills to grow taxfree; withdrawals are also untaxed if they're used for higher education.

Lately many plans have revamped their programs, adding more low-risk options and ETFs, while slashing costs -- the lowest-fee choices in plans sold directly to savers dropped 6% for the year ending last June, says Joe Hurley, head of Savingforcollege.com. Among the cheapest plans now: New York 529 (nysaves.com) and Ohio CollegeAdvantage (collegeadvantage.com).


  @Money - Last updated April 17 2013 10:09 AM ET
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