Here's how to make the switch without being penalized. By Kimberly Lankford, Contributing Editor May 26, 2015 In your article 50 Ways to Cut Your Health Care Costs, you mentioned rolling funds from a traditional IRA to a health savings account. Can I make this transfer without tax or penalty before age 59½?See Also: FAQs About Health Savings Accounts You don’t need to be 59½ or older to roll over money tax-free from an IRA to an HSA. But you do need to meet a few other requirements. You can roll over money from your IRA to an HSA only once in your lifetime, and the amount is limited to the maximum HSA contribution for the year, minus any HSA contributions you’ve already made in that year. In 2015, the HSA contribution limit is $3,350 if you have individual coverage or $6,650 for family coverage, plus up to an additional $1,000 if you’re 55 or older anytime during the year. To qualify to make any HSA contributions, you must have a health insurance policy with a deductible of at least $1,300 for individual coverage or $2,600 for family coverage in 2015. Contact your IRA and HSA administrator about making a direct transfer from one account to the other. Transferring money from the IRA to an HSA can help you get money into the HSA quickly, which you can then use tax-free for medical expenses. But if you can afford to make new contributions to the HSA, that strategy is usually even better: You get to keep more money in your IRA, and you can take a tax deduction for your new HSA contributions. Even though you could make the transfer from either a traditional or a Roth IRA, it’s better to use money from a traditional IRA. If you were to withdraw money from that account, as opposed to transferring it, you’d have to pay taxes on the withdrawal (and pay a potential penalty if you are under age 59½). But by making a direct transfer it to the HSA, you can use the money tax-free for medical expenses in any year. With a Roth, by contrast, you can already access contributions tax- and penalty-free at any time, and you can withdraw Roth earnings tax-free after age 59½ (if you’ve had an account for at least five years). For more information about the tax rules, see IRS Publication 969, Health Savings Accounts. Got a question? Ask Kim at firstname.lastname@example.org.