What Happens When You Don't Use Money from Your HSA?

Health Savings Accounts (HSAs) offer a great way to save for medical expenses while enjoying tax benefits. But what happens if you don't use all the money in your HSA? Let's explore the implications:

When you don't use the money from your HSA, it stays in the account and continues to grow tax-free. This is one of the key advantages of an HSA – the funds roll over year after year, unlike Flexible Spending Accounts (FSAs) where funds typically expire at the end of the year.

Here's what happens when you don't use money from your HSA:

• The money remains in your account indefinitely
• It continues to earn interest or investment returns
• You can use it for qualified medical expenses at any time
• If you're 65 or older, you can use the funds for non-medical expenses without penalty (though regular income tax may apply)

Not using the money in your HSA is a smart way to build a healthcare nest egg for the future. It provides a safety net for unexpected medical expenses or can serve as supplemental retirement savings.

When you don't tap into your Health Savings Account (HSA), the remaining funds essentially turn into a powerful financial tool, allowing you to plan for future medical costs without the worry of losing your investment.