What Happens to My HSA Balance at End of Year?

As the end of the year approaches, you may be wondering what will happen to your HSA (Health Savings Account) balance. It's essential to understand how HSAs work to make informed decisions about managing your healthcare expenses and savings. Here's what you need to know:

Rolling Over Balances

Unlike FSA (Flexible Spending Account), the funds in your HSA do not expire at the end of the year. The balance you have at the end of the year rolls over to the next year, allowing you to continue using it for qualified medical expenses.

Tax Advantages

HSAs offer tax advantages, such as contributions being tax-deductible, earnings growing tax-free, and withdrawals for qualified medical expenses being tax-free. It's a powerful savings tool that can help you manage healthcare costs effectively.

Investment Opportunities

Some HSA providers offer investment options once your balance reaches a certain threshold. By investing your HSA funds, you have the potential to grow your savings over time, providing even more financial security for future healthcare needs.

Using up the Balance

Even though your HSA balance rolls over each year, it's essential to utilize the funds for eligible healthcare expenses. By using your HSA for qualified medical costs, you can make the most of its benefits and save for future healthcare needs.

As the end of the year approaches, it’s common to ponder what your HSA (Health Savings Account) balance will look like. Rest assured, one of the primary advantages of an HSA is its ability to carry over funds annually, unlike a Flexible Spending Account (FSA) where funds may vanish. This rollover feature means you can utilize your savings for qualified medical expenses whenever necessary.