When Do You Have to Withdraw from an HSA?

Health Savings Accounts (HSAs) have become increasingly popular as a way to save for medical expenses while enjoying tax benefits. However, there are rules and regulations regarding when you must make withdrawals from your HSA.

Here are some important points to keep in mind:

• There is no deadline for when you have to withdraw from your HSA. This means that you can keep your funds in the account and let them grow over time.
• However, once you reach the age of 65, you can make withdrawals from your HSA for any reason, not just for qualified medical expenses. Keep in mind that if you use the funds for non-medical expenses, you will have to pay taxes on the withdrawal.
• If you withdraw funds for non-qualified medical expenses before the age of 65, you will have to pay taxes on the withdrawal as well as a 20% penalty.
• It's always recommended to keep track of your medical expenses and save your receipts. This will help you in case you are audited by the IRS and need to prove that your withdrawals were for qualified medical expenses.

Did you know that Health Savings Accounts (HSAs) provide an opportunity for you to save money on qualifying medical expenses without a mandatory withdrawal deadline? This flexibility allows you to grow your funds over time while benefitting from tax-free withdrawals for medical costs.