Should You Keep Money in HSA When You Quit Your Job?

When you quit your job, deciding what to do with your Health Savings Account (HSA) can be a crucial financial decision. An HSA is a tax-advantaged account that allows you to save money for medical expenses. Here are some factors to consider:

If you quit your job, you have several options for your HSA:

• Leave the money in the HSA: You can keep the funds in your HSA even after leaving your job. The money remains yours and can continue to grow tax-free.
• Use the funds for qualified medical expenses: You can use the money in your HSA to pay for eligible medical costs, even if you're no longer covered by an HSA-qualified high-deductible health plan.
• Roll over the funds to a new HSA: If you have a new job with an HSA-eligible health plan, you can rollover the funds from your previous HSA to the new one without any tax consequences.
• Withdraw the funds: You can withdraw the money from your HSA, but keep in mind that if you use the funds for non-qualified expenses, you'll owe income tax plus a 20% penalty if you are under 65.

Ultimately, the best choice for your HSA money when you quit your job depends on your individual circumstances. Consider talking to a financial advisor to help you make the decision that aligns with your financial goals and needs.

When you decide to quit your job, one of the biggest financial considerations arises: what should you do with your Health Savings Account (HSA)? An HSA is a powerful financial tool designed to help you save for medical expenses while enjoying tax benefits. Here are several paths you can take with your HSA after leaving your position:

• Keep the money in your HSA: Your HSA funds remain yours even after you leave your job, allowing you to enjoy tax-free growth on your remaining balance.
• Utilize your funds for qualified medical needs: Feel free to tap into your HSA for eligible medical expenses anytime, no matter your insurance status post-employment.
• Transfer your HSA funds: If you land a new job with an HSA-compatible health plan, seamlessly transfer your existing HSA balance to your new account, maintaining those tax advantages.
• Request a withdrawal: Withdrawing funds from your HSA is an option; however, withdrawal for non-qualified expenses could result in income tax and a hefty 20% penalty if you are under 65, a factor worth pondering.

Choosing the right action for your HSA after quitting your job requires thorough consideration of your financial landscape. Consult a financial advisor to ensure your choice fits your unique needs and future objectives.