Health Savings Account (HSA): What Happens to it When I Retire?

The Health Savings Account (HSA) is a great tool that is going to help
us all reduce our wellness insurance costs and debar the current
healthcare crisis in America. But what haps when a person
retires? What utilize is an HSA then?

Your HSA transforms itself at that minute you turn 65, when you
officially go eligible for Medicare. Your Health Savings Account,
which will have got served you all those old age as a nice financial cushion
before you get using your insurance policy, tosses into
something very similar to an Individual Retirement Account (IRA).

That's right. An HSA essentially goes an individual retirement account when you turn
65. The ground for that is that when you turn 65, you are
eligible for Medicare, and HSAs are not meant to assist you with
Medicare, that is its ain system.

So what haps to that money left over in your HSA? If you
haven't been ill much, there could be 100s of thousands of dollars
in there!

Don't worry, it's safe. There is no "use it or lose it" policy
with HSAs. That is one of the great things about the HSA.

No, your duteous HSA have now go a retirement account. Now
that you're 65, you can get to draw money out of your HSA without
punishment and usage it for anything. Use the money
for roller blades, dinner, a new computer, a car, or give it to your
kids. It's yours to make with what you want. No punishments for
withdrawing money.

However, remember, when you take money out of any IRA, that money is
taxed by the IRS. You got a tax-deferral when you set the money
in, and now you pay taxes to take the money out. Fair, isn't it?

If you desire to avoid paying taxes on that money, no problem. Just
lodge to using the money for healthcare disbursals (as approved in IRS
Publication 502) and you won't pay taxes on the withdrawals, even after
you're 65.

This is just one of the many ways HSAs are so utile and helpful for
Americans nest egg for their ain healthcare. The HSA is available today
from many insurance agents and financial planners.