Is there a deadline by which I have to use the money in my health savings account for medical expenses?
No. Unlike flexible spending accounts, which require you to use the money by the end of the year (or March 15 of the following year), HSAs have no deadline; you can use the money for medical expenses in any year. And because you can no longer make new HSA contributions after you sign up for Medicare, letting the money grow tax-free and using it for later expenses is a smart strategy.
“We tell older consumers to think of their HSA as a retirement fund for medical expenses,” says Keith Mendonsa, consumer specialist with eHealthInsurance.com. If you have the extra cash, you can pay for current medical expenses from your own pocket and let the money in the HSA grow. You can use the money from the account tax-free at any age for medical expenses -- for example, deductibles and co-payments, premiums for Medicare Part D and Medicare Advantage (but not medigap), and a portion of long-term-care insurance premiums. You can even use the cash in the account to reimburse yourself for the money that Social Security withholds to pay Medicare Part B premiums.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
You can use HSA money for any eligible medical expenses you paid on your own after you opened the account (but you can’t use HSA money for medical expenses you incurred before you established the account). “A little-known fact of HSAs is that you can always reimburse yourself retroactively for any expense you paid out of your pocket,” says Will Applegate, vice-president of HSA business development for Fidelity, which provides HSAs for many employers that also offer Fidelity 401(k)s. Not only can you make the withdrawals without penalties, but you won’t have to pay taxes on the money, either. That means you can use an HSA as an extra stash of tax-free money for emergencies.
Keep records of past medical bills to document reimbursement from your HSA. Some plans provide tools that help you keep track of eligible expenses. Cigna’s expense tracker lets you upload your medical receipts and mark whether you paid the bill from personal funds or from your HSA.
For more information about health savings accounts, see FAQs About Health Savings Accounts.
-
Why Playing It Safe in Retirement Is a Big RiskFear of losing money could actually cost you in retirement. Find out why being too conservative with your life savings can hurt you and how to stop that from happening.
-
Tax Refund Alert: House GOP Predicts 'Average' $1,000 Payouts in 2026Tax Refunds Here's how the IRS tax refund outlook for 2026 is changing and what steps you can take now to prepare.
-
What Not to Do in an Airport LoungeBefore you settle into that cushy lounge chair, skip the rookie moves that annoy other travelers and can even get you kicked out.
-
What You’ll Pay for Medicare in 2021Healthy Living on a Budget For Medicare premiums 2021, look for modest increases in premiums and out-of-pocket costs.
-
What Happens to Medicare If the Affordable Care Act Is Overturned?Medicare Experts say if the ACA is repealed or rescinded "it would be devastating for Medicare." Here's what might happen -- and how it could be costly for you.
-
11 Costly Medicare Mistakes You Should Avoid MakingMedicare If you don't make the right choices, you could end up with higher Medicare premiums and high out-of-pocket costs.
-
Navigate 2020 Medicare Changes During Open EnrollmentMedicare Beneficiaries can shop for new health coverage starting October 15. Find out what's new and perhaps less costly for the coming year.
-
Credit Report Error? They All Mattercredit & debt Don't dismiss a minor error. It could be the sign of something more serious.
-
Insurance for a Learning Driverinsurance Adding a teen driver to your plan will raise premiums, but there are things you can do to help reduce them.
-
529 Plans Aren’t Just for Kids529 Plans You don’t have to be college-age to use the money tax-free, but there are stipulations.
-
Medicare May be a Better Option Than Employer Health Insuranceinsurance If you are over 65 and still working, you may have a choice about whether to go with your employer's insurance plan or Medicare. Here are some factors to weigh in making your decision.
