Do You Have to Use All HSA Contributions Within the Tax Year?

One common misconception about Health Savings Accounts (HSAs) is that you have to use all your contributions within the tax year or else you lose them. However, that is not the case with HSAs. Unlike Flexible Spending Accounts (FSAs), HSA funds roll over from year to year, allowing you to save and invest your money for future healthcare expenses.

Here's how it works:

• Contributions made by both you and your employer are yours to keep, regardless of whether you use them in the same year or let them accumulate over time.
• Any unused funds in your HSA will continue to grow tax-free, giving you the opportunity to build a significant healthcare nest egg for the future.
• There is no expiration date for using the funds in your HSA, so you can use them whenever you need them, whether it's next year or several years down the line.

So, no, you do not have to use all your HSA contributions within the tax year. Take advantage of the flexibility and long-term saving potential that HSAs offer.

Many people mistakenly believe that all contributions to their Health Savings Account (HSA) must be spent within the same tax year to avoid losing them. The reality is, HSAs are quite flexible in that they allow funds to roll over annually, empowering you to save strategically for future healthcare expenses.