Do You Lose the Money in Your HSA? An In-depth Look at Health Savings Accounts

Health Savings Accounts (HSAs) have been gaining popularity as a way for individuals to save money for medical expenses while enjoying tax benefits. One common question that arises regarding HSAs is whether the money in the account can be lost. The short answer is no, you do not lose the money in your HSA.

Here's why:

• HSAs are owned by the individual, meaning the money in the account belongs to you, even if you change jobs or health plans.
• The funds in your HSA roll over from year to year, unlike Flexible Spending Accounts (FSAs) where the funds may be forfeited if not used by the end of the year.
• You can invest the money in your HSA, allowing it to grow over time and potentially earn interest or dividends.
• Once you reach age 65, you can withdraw money from your HSA for any reason penalty-free, although non-medical withdrawals will be subject to income tax.
• Even if you switch to a different type of health insurance, the money in your HSA remains yours to use for qualified medical expenses.

It's important to note that HSAs have contribution limits set by the IRS each year, and using the funds for non-qualified expenses may result in penalties. However, with proper planning and usage, an HSA can be a valuable tool for managing healthcare costs while saving for the future.

Health Savings Accounts (HSAs) are not only a smart way to save money for medical expenses, but they also provide you with financial security since the funds are yours to keep regardless of job changes.