People eligible for health savings accounts fall into three categories: good candidates, great candidates and those who’d be better off staying away.

Money in an HSA isn’t taxed when you deposit, invest or withdraw it for approved, IRS-designated medical expenses. Once you’re 65, you can withdraw the cash for any reason, medical or not. Some financial experts call an HSA a better savings vehicle than a 401(k).

There’s one giant string attached: You must have a high-deductible health planto open or contribute to an HSA, making your medical bills a key factor in whether to create one.

A great HSA candidate

The best HSA candidates won’t need to spend HSA funds on short-term health care, thereby freeing them up to stockpile the cash for retirement. Some financial advisors encourage clients to pay for medical costs out of pocket, not with the HSA, to grow the account faster.

For that reason, great HSA candidates:

• Can contribute the annual limit: $3,450 for an individual and $6,900 for a family in 2018, plus an additional $1,000 for people 55 or over
• Typically have low medical expenses and don’t often reach their annual health plan deductible
• Are young and can accumulate more money over a lifetime

Maximize your HSA’s potential by investing the money in mutual funds or stocks and not spending it. “HSA funds roll over year to year if you don’t spend them, and they’ll earn interest,” says John Young, a senior vice president at Alegeus, a benefits technology and services company.

A good HSA candidate

Few people are young, healthy and well-off enough to drop thousands into a special account each year: 55% of HSA owners exhaust their balance yearly, according to a 2016 Merrill Lynch report.

However, you’re still a good candidate for an HSA if your medical costs are reasonably low and you can contribute enough money to cover them. In this case, the HSA’s tax benefits can still come in handy.

Who should stay away

In this category, the HSA isn’t the issue. It’s the high-deductible health plan you must have that will cover few expenses until you’ve paid at least $1,350 (individual) or $2,700 (family).

After that, you could pay 10% to 40% out of pocket for each covered service, up to $6,650 for an individual or $13,300 for a family in 2018.

Though you’ll have lower premiums, “you’re going to pay a lot of money for each of your doctor visits and prescriptions,” says Ijeoma Iruke, consumer education specialist at HSAstore.com.

So skip the HSA and go for a higher-coverage plan, if possible, if you have something like:

• Medical expenses that are high enough that you meet your deductible each year or that they would cause a strain if you paid upfront
• A large, known expense coming up, such as planned surgery or pregnancy