Can You Roll Over HSA to TSP?

Health Savings Account (HSA) is a valuable tool for saving for medical expenses while maximizing tax benefits. However, if you are considering transferring the HSA to a Thrift Savings Plan (TSP), there are some important factors to consider.

Firstly, it's essential to understand that HSA funds can't be directly rolled over to a TSP. The two accounts are different in their purposes and guidelines, which restricts such a transfer.

While a direct rollover is not possible, there are alternative options that individuals can explore:

• Transferring HSA funds to another HSA account: If you are changing HSA providers or looking for better investment options, you can transfer your HSA balance to a new HSA account without incurring taxes or penalties.
• Using HSA funds for eligible medical expenses: You can continue to use your HSA funds to pay for qualified medical expenses tax-free, even if you no longer contribute to the account.
• Keeping the HSA for future use: HSAs do not have a 'use-it-or-lose-it' rule, so you can keep the account open and accumulate savings for future healthcare needs.

It's important to consult with a financial advisor or tax professional before making any decisions regarding your HSA and TSP accounts. Each individual's financial situation is unique, and personalized advice can help you make the best choice for your circumstances.

While you cannot roll over your Health Savings Account (HSA) directly into a Thrift Savings Plan (TSP), understanding the rules regarding both accounts is essential for making the most of your financial resources.