What Happens to Money in HSA If You Don't Use It? - Understanding HSA Basics

Health Savings Accounts (HSAs) are a great way to save for medical expenses while enjoying tax benefits. But what happens to the money in your HSA if you don't use it? Let's find out!

If you don't use the money in your HSA, it stays in the account and continues to grow tax-free. You can use it for eligible medical expenses at any time, even in the future. There are no expiration dates or use-it-or-lose-it rules with HSA funds.

Here's what happens to the money in your HSA if you don't use it:

• The funds remain in your HSA account indefinitely
• The money earns interest or investment returns, helping it grow over time
• You can use the funds to pay for qualified medical expenses at any point in the future

It's important to note that if you withdraw HSA funds for non-medical expenses before the age of 65, you will incur a penalty and owe taxes on the amount withdrawn. However, after the age of 65, you can withdraw HSA funds for any reason without penalties, although you will owe income tax on the withdrawal.

By understanding what happens to the money in your HSA if you don't use it, you can make informed decisions about saving for future medical expenses and maximizing the benefits of your HSA.

Health Savings Accounts (HSAs) are not just a tool for immediate health expenses; they also serve as a powerful long-term savings vehicle. If you choose not to use the funds in your HSA, rest assured that they will remain in your account and enjoy tax-free growth over time.