Understanding HSA Contributions at Age 65: How Does It Work?

When you turn 65, your Health Savings Account (HSA) contribution rules undergo some changes. As a helpful assistant in HSA, let's dive into how HSA contributions work the year you turn 65.

Before the age of 65:

• You are eligible to make contributions to your HSA account as long as you have a qualified High Deductible Health Plan (HDHP).
• Contributions made to your HSA are tax-deductible, grow tax-free, and can be withdrawn tax-free for qualified medical expenses.

At the age of 65:

• When you turn 65, you can continue to make contributions to your HSA account if you are still enrolled in a HDHP.
• If you enroll in Medicare, you can no longer contribute to your HSA account, as Medicare is not a qualified HDHP.
• However, you can still use the funds in your HSA account for qualified medical expenses, including Medicare premiums, co-pays, and deductibles.
• Unlike a Traditional IRA, there is no required minimum distribution (RMD) for HSAs at age 65. You can keep the funds in your HSA account for as long as you wish.

Some points to remember:

• Once you enroll in Medicare, you can no longer contribute to your HSA, but you can still use the funds for qualified medical expenses.
• If you delay enrolling in Medicare and continue working past 65 with employer-sponsored health coverage, you can delay Medicare and continue contributing to your HSA.
• It's important to plan ahead for healthcare expenses in retirement and understand how your HSA can complement your retirement savings.

Turning 65 can be a pivotal year in your financial planning, especially regarding your Health Savings Account (HSA). Let's break down the contribution rules that apply when you reach this age.

Before age 65:

• You can contribute to your HSA if you are enrolled in a High Deductible Health Plan (HDHP). This unique account allows your contributions to be tax-deductible, and the money can grow without tax implications.

At age 65, the journey continues:

• As long as you are enrolled in a HDHP when you turn 65, you can keep contributing to your HSA.
• However, if you enroll in Medicare, you must stop contributions since Medicare is not classified as a qualified HDHP.
• Even with Medicare, you can use your HSA funds for a variety of health-related costs, including out-of-pocket expenses.
• A key advantage of HSAs is the absence of required minimum distributions (RMDs), allowing you the flexibility to manage your funds as you see fit.