Do HSA Funds Expire? Understanding the Basics of Health Savings Accounts

Health Savings Accounts (HSAs) are a valuable tool for managing healthcare expenses, offering tax advantages and flexibility for individuals and families. One common question that arises about HSA funds is whether they expire.

Unlike many other types of accounts, HSA funds do not expire. This means that the money you contribute to your HSA is yours to keep, and it will roll over from year to year. There is no time limit on when you must use the funds, allowing you to save for future medical expenses and build a nest egg for healthcare costs in retirement.

It's important to note that while HSA funds do not expire, there are guidelines for how they can be used. Withdrawals from your HSA must be used for qualified medical expenses to remain tax-free. If you use HSA funds for non-qualified expenses before the age of 65, you may incur taxes and penalties.

Contributions to your HSA can come from both you and your employer, up to certain annual limits set by the IRS. These contributions are tax-deductible, meaning you can lower your taxable income by saving in your HSA.

Key Points About HSA Funds:

• HSAs do not expire, and funds roll over from year to year
• Withdrawals must be used for qualified medical expenses to remain tax-free
• Contributions can come from both you and your employer
• Contributions are tax-deductible within IRS limits

Health Savings Accounts (HSAs) are an incredible way to manage your medical expenses, providing you with a flexible savings tool that has substantial tax benefits. A vital part of understanding HSAs is knowing that your funds will not expire.