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If you aren't reimbursing medical expenses, the money is taxed, even when you are 65+. (It functions sort of like a Traditional IRA in that circumstance.) The
by caturopath 5y ago
If you aren't reimbursing medical expenses, the money is taxed, even when you are 65+. (It functions sort of like a Traditional IRA in that circumstance.)
The real trick is to save medical receipts for years/decades and reimburse only when you actually need the money, paying out of pocket until then.
- PaulDavisThe1st 5y agoWhat I mean is yes, indeed, it functions like an additional traditional IRA, gains are accumulated tax free, and the balance can be withdrawn in any way you want post-65. Does that trick actually work?
- caturopath 5y ago> Does that trick actually work? There is no time-boxing on reimbursement, so it should. HSAs are only about a decade old, so no one has done the extreme versions of it yet, but a decent number of folks are squirreling away receipts and letting the money grow.
- astura 5y agoWhy wouldn't it? There's no time limit on using the funds and no time limit on reimbursing yourself for medical expenses. Kinda like a backdoor Roth, no rules prevent it, so it works.