HSA Question,backdoor IRA
Is it possible to set up a HSA ,adding max. funds to it, not touching it (withdrawing money), and after I am 65 yrs. old use it like an IRA? I would pay those health bills out of pocket up to when my deductable kicks in. Thanks for the help
Permalink Submitted by Alan Spross on Fri, 2012-05-25 15:36
You can accumulate funds in your HSA, however you must still use those funds for qualified medical expenses whereas you can use IRA funds for whatever you wish. If you withdraw HSA funds and do not complete Form 8889 showing you also had qualified medical expenses then your HSA distribution would be taxable, even though you would avoid the penalty after age 65.
Basic Medicare premiums and long term care premiums are considered qualified expenses (but not Medigap premiums).
A limited accumulation strategy might be to pay your medical costs from the HSA in years where you cannot itemize them, but if you can itemize them you would pay out of pocket.