Can You Roll Over HSA at the End of the Year?

Health Savings Accounts (HSAs) are an excellent way to save money for medical expenses while enjoying tax benefits. One common question that many HSA account holders have is whether they can roll over their HSA balance at the end of the year. The short answer is - yes, you can roll over your HSA at the end of the year!

Rolling over your HSA balance allows you to keep your funds and continue to grow your savings for future medical needs. Here are some important points to consider when it comes to rolling over your HSA:

• You can rollover your HSA balance indefinitely without any penalties.
• Any unused funds in your HSA at the end of the year will automatically roll over to the next year.
• There is no 'use it or lose it' rule with HSAs like there is with Flexible Spending Accounts (FSAs).
• Rollover funds continue to grow tax-free, just like the rest of your HSA balance.

It's important to note that while you can roll over your HSA balance, there are yearly contribution limits set by the IRS that you must adhere to. For 2021, the contribution limit for individuals is $3,600 and $7,200 for families. If you are 55 or older, you can also make catch-up contributions of an additional $1,000.

By taking advantage of rolling over your HSA balance, you can continue to build your savings for healthcare expenses in the future. It's a valuable benefit that can provide financial security when unexpected medical needs arise.

Health Savings Accounts (HSAs) serve as a powerful tool that allows individuals to save money for medical expenses while taking advantage of generous tax benefits. One frequently asked question among HSA account holders is whether the balance can be rolled over at the end of the year. The great news is - absolutely yes, you can roll over your HSA at the end of the year!

By rolling over your HSA balance, you get to retain your funds and allow them to accumulate for future medical needs. Here are a few vital points to ponder when considering HSA rollovers:

• Your HSA balance can be rolled over indefinitely, and there are no associated penalties for doing so.
• All remaining funds in your HSA at the conclusion of the year will seamlessly roll over into the next year.
• Unlike Flexible Spending Accounts (FSAs), HSAs do not adhere to a 'use it or lose it' policy, which is a great relief!
• The funds rolled over will continue to grow tax-free, mirroring the rest of the funds within your HSA.

However, do remember that while rolling over your HSA balance is allowed, you still need to observe the annual contribution limits set by the IRS. In 2021, individuals have a limit of $3,600 for contributions, while families can contribute up to $7,200. Additionally, if you are aged 55 or older, there is an opportunity for a catch-up contribution of an additional $1,000.

Leveraging the ability to roll over your HSA balance can significantly boost your savings for healthcare expenses in the long run. It’s a tremendous benefit that can help provide peace of mind in case unexpected medical costs arise.