What should you do with funds in an HSA once you turn 65 and start receiving Medicare benefits? Is having both like wearing a belt with suspenders?
An existing HSA can be used for medical expenses not covered by Medicare, such as premiums for supplementary Medicare insurance, says Ryan McCostlin, an HSA expert at Bernard Health advisors based in Nashville, Tennessee. Other eligible expenses not covered by Medicare include in-home and nursing home care, dental care, eye exams, hospital expenses, and prescriptions. McCostlin says. “You can even use HSA money to pay for Medicare-related insurance premiums with pre-tax dollars.”
HSA funds can also be used for dental and eye care, which are not covered by Medicare.
HSAs are typically offered by employers, though it’s also possible to set one up on your own. Like a 401(k) or tax-deductible IRA, the HSA allows the participant a tax deduction on contributions. Contributions and withdrawals are tax-free if used for approved medical expenses.
Even though you cannot open a new HSA or contribute to an existing HSA once you are on Medicare, Beacon Associates can help you manage an existing HSA plan for your post-65 needs. Beacon Associates can explain HSA contribution and withdraw guidelines, as well as the tax benefits. Call us today!
Information collected from: HSAs Offer Benefits for Older Investors
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