Do funds in an HSA roll over from year to year?

Do funds in an HSA roll over from year to year?

• A. Yes
• B. No
• C. Only if you are enrolled in a HDHP
• D. Only after 65

Answer: (A)

An HSA is built to accumulate funds for future medical costs, not to vanish at year's end. Any money you contribute, plus any investment earnings, stays in the account from year to year. There’s no “use it or lose it” rule, so the balance simply carries over to the next year and can grow if you leave it invested or add more funds. This makes HSAs a long-term savings vehicle for healthcare expenses, even if you don’t spend everything now. You can continue contributing in future years as long as you’re eligible (you must be enrolled in a high-deductible health plan to contribute). The rollover behavior isn’t affected by age; age mainly affects how withdrawals are taxed if you take money out for non-medical purposes after 65.

An HSA is built to accumulate funds for future medical costs, not to vanish at year's end. Any money you contribute, plus any investment earnings, stays in the account from year to year. There’s no “use it or lose it” rule, so the balance simply carries over to the next year and can grow if you leave it invested or add more funds. This makes HSAs a long-term savings vehicle for healthcare expenses, even if you don’t spend everything now.

You can continue contributing in future years as long as you’re eligible (you must be enrolled in a high-deductible health plan to contribute). The rollover behavior isn’t affected by age; age mainly affects how withdrawals are taxed if you take money out for non-medical purposes after 65.