Can you use HSA funds for anything after age 65?

How do I withdraw my HSA funds after age 65? At age 65, you can withdraw your HSA funds for non-qualified expenses at any time although they are subject to regular income tax. You can avoid paying taxes by continuing to use the funds for qualified medical expenses.

What qualifies a high deductible health plan for HSA?

A high deductible plan (HDHP) can be combined with a health savings account (HSA), allowing you to pay for certain medical expenses with money free from federal taxes. For 2021, the IRS defines a high deductible health plan as any plan with a deductible of at least $1,400 for an individual or $2,800 for a family.

How much can I contribute to my HSA in the year I turn 65?

Excess Contributions The IRS annual contribution limits for HSAs for 2021 is $3,600 for individual coverage and $7,200 for family coverage. Individuals age 55+ can contribute an additional $1,000 per year as a “catch-up” contribution.

What happens when you contribute to a HSA at age 65?

However, if you take a distribution that is not used for qualified medical expenses, it will be taxable. HSAs and Medicare. When it comes to making contributions to your HSA when you reach age 65, things can get a little tricky. This is due to the interaction of the HSA rules with Medicare.

What are the rules for a high deductible HSA?

The definition of a qualifying HDHP changes periodically. For 2021, your insurance may qualify as a high-deductible health plan if one of the following is true: Your coverage is self-only (individual coverage), your plan’s minimum annual deductible is at least $1,400, and your out-of-pocket annual expense is capped at $7,000.

Is the HSA penalty free after age 65?

All HSA distributions after age 65 are penalty free, even if the funds are not used for qualified health expenses. However, if you take a distribution that is not used for qualified medical expenses, it will be taxable.

When do you lose your eligibility for a HSA?

HSA Rules Get Tricky Once You Hit Age 65. You lose your eligibility to make an HSA contribution as of the first day of the month you turn age 65 and enroll in Medicare. You can make a pro-rated contribution for the year to your HSA for the months before you became ineligible due to your enrollment in Medicare.