What Happens to Unused Money in an HSA Account?

One of the great features of a Health Savings Account (HSA) is that the money you contribute rolls over from year to year, unlike a Flexible Spending Account (FSA). This means that any unused money in your HSA account doesn't disappear at the end of the year, giving you peace of mind that your savings are safe and available when you need them.

So, what exactly happens to the unused money in your HSA account? Here are a few important points to consider:

• Unused funds in your HSA account continue to grow tax-free, further increasing your savings over time.
• You can use the money in your HSA for qualified medical expenses at any time, even if you've changed health plans or employers.
• If you reach the age of 65, you can withdraw money from your HSA for any purpose without penalty, although regular income tax will apply if not used for medical expenses.
• The funds in your HSA can also be passed on to your spouse or designated beneficiary tax-free in the event of your death.

It's important to note that HSA funds are for medical expenses only until you reach the age of 65. After that, you can use the money for any purpose without penalty, making it a valuable retirement savings tool.

One of the standout features of a Health Savings Account (HSA) is how it allows your contributions to roll over indefinitely from year to year. This is a significant advantage over Flexible Spending Accounts (FSAs), where money can be lost if not spent within the year. The rollover feature not only safeguards your unused funds but also grants you the freedom to utilize your savings when they are truly needed.