When must you stop contributing to an HSA?
Asked by: Miss Rhianna Aufderhar I | Last update: October 16, 2025Score: 4.1/5 (44 votes)
At what point should I stop contributing to HSA?
- Make sure all HSA contributions end before your 65th birthday month.
- If your birthday is on the first of the month, make sure you stop your contributions by the beginning of the month before your birthday month.
Do I have to stop HSA contributions 6 months before Social Security?
If you work beyond age 65 and defer Medicare, however, you will need to stop contributing to your HSA six months prior to receiving Social Security. Once you begin drawing Social Security after your full retirement age, you are required to have Medicare coverage and can no longer contribute to an HSA.
Can I still contribute to my HSA after age 65?
If you are not enrolled in Medicare and are otherwise HSA eligible, you can continue to contribute to an HSA after age 65. You are also allowed to contribute the $1,000 catch-up. If you signed up for Medicare Part A and now want to decline it, you can do so by contacting the Social Security Administration.
Can an employee stop contributing to HSA mid year?
Yes, you can change your HSA contributions after open enrollment. Unlike other benefits, HSAs allow adjustments at any time during the year.
When to Stop HSA Contributions Before Medicare
What is the HSA 12 month rule?
It means you must remain eligible for the HSA until December 31 of the following year. The only exceptions are death or disability. If you violate the testing period requirement, your ineligible contributions become taxable income.
What are the rules for contributing to an HSA?
- You are covered under a high deductible health plan (HDHP), described later, on the first day of the month.
- You have no other health coverage except what is permitted under Other health coverage, later.
- You aren't enrolled in Medicare.
At what age can you no longer have an HSA?
When you turn 65 and begin Medicare coverage, you lose HSA eligibility on the first day of that month. For example, if your birthday is April 19, you are no longer eligible to contribute to an HSA as of April 1.
Does it make sense to contribute to HSA after retirement?
Post-Retirement Contributions
Someone who wants to keep making contributions after retirement can do so by either not enrolling in Medicare or by withdrawing from the program. While rare, both are options. However, it is unlikely that this would make sense financially.
What is the 6 month rule for Medicare and HSA?
If you have a Health Savings Account (HSA), you and your employer should stop contributing to your HSA 6 months before you retire or apply for benefits from Social Security (or the Railroad Retirement Board). This will ensure you avoid a tax penalty.
What is the penalty for HSA contributions while on Medicare?
If you or any other authorized party, like an employer, make excess contributions to your HSA once you have Medicare, you can be charged a 6% Internal Revenue Service tax penalty on those funds and any interest they accrue until the funds are removed from your account.
Is it wise to draw Social Security at 62?
Taking Social Security early reduces your benefits, but you'll also receive monthly payments for a longer period of time. On the other hand, taking Social Security later results in fewer checks during your lifetime, but delaying means each check will be larger.
How much should I have in my HSA at retirement?
The amount of money you should have in your HSA during retirement depends on your healthcare needs and circumstances. According to the Fidelity Retiree Health Care Cost Estimate, a single person who is age 65 in 2023 should aim to have about $157,000 saved (after tax) for healthcare expenses during retirement.
Should I stop contributing to my HSA before Medicare?
An IRS penalty applies to HSA contributions made, even if unknowingly, during the Part A retroactive period. To avoid an IRS penalty, stop contributions to the HSA between 1-7 months prior to enrolling in Medicare Part A or claiming Social Security (SS) benefits after age 65 years.
What is the HSA account loophole?
The ultimate loophole available to almost everyone under the age of 65 in our tax code is the Health Savings Account (HSA). It is the only account you can contribute to and deduct the contribution and then withdraw the money tax free. Think about that, a tax deduction going in and no taxes going out.
Can you collect Social Security and still contribute to an HSA?
If you have applied for or are receiving Social Security benefits, which automatically entitle you to Part A, you cannot continue to contribute to your HSA.
When should I stop contributing to my HSA?
Once you turn 65, you can use the money in your HSA for anything you want. If you don't use it for qualified medical expenses, it counts as income when you file your taxes. Six months before you retire or get Medicare benefits, you must stop contributing to your HSA.
Is it better to max out HSA or 401k?
First off, most experts would recommend maxing out HSA contributions before maxing out 401(k) contributions because of the tax advantages that come with the HSA. There's no minimum age for HSA fund distributions, so when you need it to spend money on health care, it's got your back.
What is the downside of an HSA?
Drawbacks of HSAs include tax penalties for nonmedical expenses before age 65, and contributions made to the HSA within six months of applying for Social Security benefits may be subject to penalties. HSAs have fewer limitations and more tax advantages than flexible spending accounts (FSAs).
Can I still contribute to an HSA after age 65?
As shown above, a person can generally maintain their eligibility to contribute to an HSA after age 65 as long as they are employed, enrolled in an HSA-eligible HDHP, and not enrolled in Medicare or other non-HDHP insurance.
Can HSA be used for dental?
Yes, you can use a health savings account (HSA) or flexible spending account (FSA) for dental expenses.
What is the 6 month rule for HSA contributions?
This is because when you enroll in Medicare Part A, you receive up to six months of retroactive coverage, not going back farther than your initial month of eligibility. If you do not stop HSA contributions at least six months before Medicare enrollment, you may incur a tax penalty.
Can I use HSA for gym membership?
Gym memberships. While some companies and private insurers may offer discounts on gym memberships, you generally can't use your FSA or HSA account to pay for gym or health club memberships. An exception to that rule would be if your doctor deems fitness medically necessary for your recovery or treatment.
What disqualifies you from contributing to an HSA?
You can't contribute to an HSA if you have Medicare coverage, or a plan that pays its share of a covered service without you having to pay deductibles or copayments first (called “first dollar coverage”).