We covered in previous posts what a Health Savings Account is and how they can be beneficial. One of those benefits is the ability to pull money out of your HSA account once you reach the age of 65 as tax-free dollars even if you are not using it for healthcare expenses. This enables individuals to use their HSA as a part of a retirement plan. You pay into your HSA account each year and accumulate funds that earn interest. If you build upon that at age 65 that money can be used for expenses other than healthcare, and withdraws are still tax-free.
As of 2015 you can contribute up to $3,350 for an individual and $6,650 for a family annually. If you are over 55 there is a provision allowing an additional 1,000 to be contributed. You must complete contributions for the fiscal year by April 15th of the following year. HSA funds are able to be carried over year after year without any limits.
Take a look at the earning potential that an HSA provides in the graph, and see how beneficial contributions can be. Medical Mutual has a great fact sheet for HSA’s that you can read HERE.