What Happens to HSA if I Don't Spend? - Understanding the Fate of Your Unspent HSA Funds

Health Savings Accounts (HSAs) are a valuable tool for managing healthcare expenses, allowing individuals to set aside pre-tax money to cover medical costs. However, a common question that arises is: what happens to my HSA funds if I don't spend them?

When it comes to unspent HSA funds, here's what you need to know:

• Unspent HSA funds roll over from year to year, unlike Flexible Spending Accounts (FSAs) that have a 'use-it-or-lose-it' rule.
• There is no expiration date for HSA funds, so you can continue to accumulate savings for future healthcare needs.
• If you change jobs or health insurance plans, your HSA funds are still yours to keep and use for eligible medical expenses.
• If you reach retirement age, you can use your HSA funds for any purpose penalty-free, although income tax will apply if not used for qualified medical expenses.
• Upon your passing, you can designate a beneficiary who can inherit your HSA funds tax-free.

It's important to be aware of the options available for your unspent HSA funds to make the most of this valuable savings tool.

Health Savings Accounts (HSAs) are a fantastic way to prepare for unexpected medical costs, and a common concern among account holders is the fate of their unspent funds. If you find yourself with leftover money in your HSA at the end of the year, don’t worry!