What Happens to Leftover Money in HSA?

Health Savings Accounts (HSAs) are a valuable tool for managing healthcare costs and saving for the future. One common question that individuals have is what happens to leftover money in an HSA. It's important to understand the rules surrounding leftover HSA funds to make the most of this savings vehicle.

When it comes to leftover money in an HSA, there are several key points to keep in mind:

• The funds in your HSA are yours to keep, even if you change jobs or switch healthcare plans.
• Unlike Flexible Spending Accounts (FSAs), there is no 'use it or lose it' rule with HSAs. This means that any money left in your HSA at the end of the year rolls over to the next year.
• If you have leftover HSA funds when you turn 65, you can use them for non-medical expenses without penalty. However, you will need to pay income tax on the withdrawals.
• Alternatively, you can continue to use your HSA funds for qualified medical expenses in retirement tax-free.

It's essential to track your HSA contributions and withdrawals to take full advantage of the tax benefits and flexibility that HSAs offer. By understanding what happens to leftover money in an HSA, you can make informed decisions about your healthcare savings strategy.

When it comes to leftover money in your Health Savings Account (HSA), it’s reassuring to know that these funds are yours to keep regardless of any changes in your job or healthcare provider. This provides a great deal of financial stability.