What Happens If You Don't Use the Money in an HSA?

Health Savings Account (HSA) is a valuable tool for managing healthcare costs and saving for the future. However, what happens if you don't use the money in an HSA? Let's explore the possibilities.

1. The money in an HSA rolls over from year to year, unlike Flexible Spending Accounts (FSAs) which have a 'use it or lose it' rule.

2. You can continue to contribute to your HSA and accumulate funds for future medical expenses.

3. If you change jobs or health plans, you can take your HSA funds with you.

4. You can use the money in your HSA to pay for qualified medical expenses tax-free at any time, even years down the road.

5. If you withdraw funds for non-medical expenses before age 65, you will incur a 20% penalty in addition to paying income taxes.

6. After age 65, you can withdraw funds for non-medical expenses penalty-free, but you will still have to pay income taxes.

In conclusion, the money in an HSA is always yours to keep and use for healthcare expenses, providing flexibility and tax advantages.

One of the greatest benefits of a Health Savings Account (HSA) is that if you don’t use the money in it, it doesn’t expire. This means that your savings can accumulate over time, providing a solid financial cushion for your healthcare needs in the future.