What’s the Best Way to Use My HSA in Retirement?

First, congratulations on your retirement! And congratulations on having an HSA!

Now, assuming you are covered by Medicare, this means you can no longer fund your health savings account (HSA). So, if finding the best and easiest way to spend your HSA funds is what you’re looking for — you’ve come to the right place.

In retirement, you may have two ways to use your HSA funds. The first is by reimbursing yourself from your HSA with saved receipts from past eligible expenses paid for out of pocket (meaning with a regular credit card, debit card, cash, or in other words, not with your HSA). This is a strategy used by many to allow HSA funds to grow tax-free. If you do have these saved expenses for reimbursement, you may withdraw from your HSA account the amount that matches those receipts, and use the funds for any purpose. For this, you must have good record keeping of past expenses, and you must have the receipts handy in case of an IRS audit. We even help you track and store all of your receipts from purchases made at HSA Store in one safe place with our Expense Dashboard. But remember — you can only reimburse yourself for expenses incurred after your HSA was established.

The other way to use your HSA funds in retirement is to continue using the funds to pay for eligible expenses. You can use your HSA dollars for any eligible expenses in the future, provided you don't use other pre-tax accounts to pay for those expenses. The best place to start is with our Eligibility List — the web’s most comprehensive list of products and services eligible for tax-free spending. HSA Store carries all of your favorites from eligible pain relievers to sunscreen, and much more with a 100% eligible guarantee. We even help you track and store all of your receipts from purchases made at HSA Store in our Expense Dashboard for true, zero guesswork shopping.

Pro tip: For early retirees with plenty of saved up eligible, unreimbursed expenses, you would be able to reimburse yourself from your HSA and delay collecting Social Security retirement benefits to maximize your Social Security check.

Note, we are not tax professionals, nor should this article be considered professional tax or financial advice. To find the best solutions for your needs, be sure to speak to a qualified tax or financial professional before making any decisions.


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