Can You Move HSA Money to a 401k? Understanding Your Options

Many people wonder if they can move their HSA money to a 401k, and the answer is both yes and no, depending on the circumstances.

If you leave your job or no longer have an HSA-eligible health plan, you can transfer the funds from your HSA to a 401k without any tax penalties. However, this action is irreversible, so it's important to consider your options carefully.

Here are some key points to keep in mind:

• You can't directly roll over HSA funds to a 401k while actively enrolled in an HSA-eligible health plan.
• If you're no longer eligible for an HSA, moving the money to a 401k can be a smart financial move.
• Transferring funds from an HSA to a 401k is considered a non-qualified distribution, meaning it's subject to income tax, but not the 20% penalty.

Before making any decisions, consult with a financial advisor to weigh your options and ensure you understand the implications of moving HSA money to a 401k.

Many people find themselves asking whether it's possible to transfer HSA funds to a 401k. The truth is, the answer can vary based on your personal situation and eligibility.

If you're no longer tied to a job or an HSA-eligible health plan, you might have the option to roll over funds from your HSA to a 401k tax-free. However, take care because once this transfer is made, it is final and cannot be undone.

Here are a few things to remember:

• While you're actively enrolled in an HSA-eligible health plan, rolling over HSA funds to a 401k is not permitted.
• If you've lost your eligibility for an HSA, transferring your funds into a 401k could provide a boost to your retirement savings.
• Keep in mind that moving HSA funds to a 401k counts as a non-qualified distribution, which means you'll owe income tax on it, but thankfully, you avoid the 20% early withdrawal penalty.

Before proceeding with any transfers, it's wise to get advice from a financial planner to fully understand your options and the potential consequences of moving HSA money into a 401k.