Can You Use Your HSA Money for Something Else?

Health Savings Accounts (HSAs) are a great tool for saving money on medical expenses, but what happens if you have funds left over that you didn't use for healthcare? Many people wonder if they can use their HSA money for something else. The short answer is yes, but there are some important things to keep in mind.

HSAs are tax-advantaged accounts that are specifically designed to help individuals save for medical expenses. However, after the age of 65, you can withdraw funds from your HSA for any reason without penalty. While you can use your HSA money for non-medical expenses after 65, keep in mind that withdrawals for non-qualified medical expenses are subject to income tax.

It's important to note that if you use your HSA money for non-qualified expenses before the age of 65, you will incur both income tax and a 20% penalty. However, there are some exceptions to this rule, such as disability or if you are no longer eligible to contribute to an HSA. In these cases, the penalty may be waived.

Health Savings Accounts (HSAs) are an incredibly effective way to manage and save for your medical expenses. If you find yourself with leftover HSA funds, you might wonder what else you can do with that money. The answer is yes, but be cautious of when and how you withdraw it.