Does HSA Money Roll Over from Year to Year? All You Need to Know About HSA Accounts

Health Savings Accounts (HSAs) have become a popular way for individuals and families to save for medical expenses while enjoying tax advantages. One common question that many people have about HSA accounts is whether the money in the account rolls over from year to year.

So, does HSA money roll over from year to year? The simple answer is yes, HSA funds roll over from year to year. Unlike Flexible Spending Accounts (FSAs) which have a 'use it or lose it' rule where the funds do not carry over at the end of the year, HSA funds are yours to keep and grow over time.

Here are some key points to understand about HSA rollovers:

• Contributions to your HSA are not subject to federal income tax.
• HSA funds can be invested, allowing for potential growth over time.
• Any unused funds in an HSA rollover to the next year and continue to accumulate tax-free interest.
• You can use your HSA funds for qualified medical expenses tax-free at any time, even if you no longer have an HDHP.

It's important to note that HSA funds are meant to be used for qualified medical expenses. If you withdraw funds for non-qualified expenses before age 65, you may be subject to taxes and penalties. However, after age 65, you can withdraw funds for non-medical expenses penalty-free, though you will owe income tax on the withdrawal.

Overall, Health Savings Accounts offer a flexible and tax-efficient way to save for current and future medical expenses. By understanding how HSA rollovers work, you can make the most of your account and enjoy the benefits it provides.

Health Savings Accounts (HSAs) not only allow you to save for medical expenses but also accumulate tax-free growth year after year. This makes HSAs a dual benefit tool for both saving and investing in your health care needs!