Funding HSA before 65 outside employer plan

Submitted by Greg Gorham on Thu, 2017-11-16 14:03

I hope this is not off topic.

I have retired, no paycheck/taxable income and am 58.

I have done the “once in a lifetime” rollover from Trad IRA to my HSA.

I want to fund the HSA as much as possible while eligible. I believe I can self fund up to the limit myself and get a tax deduction.

I also have stock that has appreciated a lot and would like to know if the tax on the stock sale proceeds can be reduced by the tax deduction of the HSA funding.



Submitted by Alan - IRA critic on Thu, 2017-11-16 18:22

  • Yes, you can make a deductible HSA contribution as long as you have the required HDHP coverage for the required period. The TIRA funding distribution you did reduces the amount you could otherwise contribute to the HSA for that particular year. 
  • The deduction will reduce your AGI. Actually better than reducing your cap gains on the stock sale which are at a lower rate, since the cap gains are stacked on top of your other taxable income, the HSA contribution should reduce your taxable income at the full ordinary income rate.

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