What Happens If You Don't Use Yearly HSA Money?

Health Savings Accounts, or HSAs, provide individuals with a tax-advantaged way to save money for medical expenses. One common question that arises is: what happens if you don't use the funds in your HSA by the end of the year?

If you don't use the money in your HSA by the end of the year, it rolls over to the next year. Unlike Flexible Spending Accounts (FSAs), there is no 'use it or lose it' rule with HSAs. This rollover feature is a significant advantage of HSAs and allows individuals to continue building their savings for future healthcare expenses.

Here are some key points to remember about what happens if you don't use your yearly HSA money:

• Funds in your HSA roll over from year to year, there is no deadline for spending them.
• HSAs are portable, meaning you keep the account and the funds even if you change jobs or health insurance plans.
• You can invest the money in your HSA, allowing it to grow over time for potential future healthcare needs.
• If you withdraw money from your HSA for non-qualified medical expenses before age 65, you will incur a penalty and owe taxes on the amount withdrawn.

It's essential to understand how HSAs work and make strategic decisions about using the funds in your account. By utilizing your HSA effectively, you can take advantage of the tax benefits and build savings for healthcare costs in the future.

When you don’t use the funds in your Health Savings Account (HSA) by the end of the year, rest assured that your money doesn’t just disappear. It rolls over to the following year, making HSAs a far more flexible option than Flexible Spending Accounts (FSAs), which often come with a 'use it or lose it' clause.