What If I Withdraw From HSA? Understanding the Impact of HSA Withdrawals

Withdrawing from your Health Savings Account (HSA) can have both benefits and consequences. Before making a withdrawal, it's important to understand how it can impact your finances and overall health

When you withdraw funds from your HSA, you can use the money for qualified medical expenses, such as doctor visits, prescriptions, and other eligible healthcare costs. This can be a convenient way to pay for healthcare needs without dipping into your regular income.

However, it's crucial to be aware of the implications of withdrawing from your HSA:

• Withdrawals for non-qualified expenses before age 65 may incur income tax and a 20% penalty.
• After age 65, you can withdraw funds for non-medical expenses penalty-free, but they will be subject to income tax.
• Unused funds in your HSA can be carried over from year to year, allowing you to save for future healthcare costs.

Before making a withdrawal from your HSA, consider the following:

• Are you using the funds for qualified medical expenses?
• Do you have enough savings in your HSA to cover future healthcare needs?
• Are there other ways to pay for non-medical expenses without dipping into your HSA?

Withdrawing from your Health Savings Account (HSA) offers flexibility, especially when navigating unexpected medical expenses. This financial tool allows you to access funds meant solely for healthcare costs, such as surgeries, therapies, or even dental care.