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Medicare, Social Security and Your Health Savings Account

Continue to contribute to an HSA after you sign up for Medicare Part A and you will face tax penalties.

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I didn't sign up for Medicare at 65 because I'm still working and wanted to contribute to my health savings account. I plan to apply for Social Security at 66. Can I still refuse Part A and contribute to my HSA? --W.S., Cleveland

See Also: 5 Ways to Ease the Pain of Health Care Costs in Retirement

No. Even though you may be able to delay signing up for Part A after age 65 if you're working (your employer usually must have 20 or more employees), you cannot decline Part A after you sign up for Social Security. Once you're enrolled in Part A, you'll have to stop making HSA contributions -- or face a penalty for excess contributions. If you don't take Medicare Part A when you first qualify (generally when you turn 65), you should stop contributions to your HSA at least six months before you sign up for Social Security because your Part A benefits will be retroactive for up to six months if you were 65 or older during that time.

See Also: QUIZ: Test Your Retirement IQ

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