Rolling Over a Traditional IRA to a Health Savings Account
You don’t need to be 59½ or older to roll over money tax-free from an IRA to an HSA. But you do need to meet a few other requirements. You can roll over money from your IRA to an HSA only once in your lifetime, and the amount is limited to the maximum HSA contribution for the year, minus any HSA contributions you’ve already made in that year.
Americans are generally aware of tax-advantaged investment vehicles such as 401(k) plans, individual retirement accounts and 529 college savings plans. But one instrument, the health savings account, isn’t as well known, although it offers three separate tax benefits. Advisors say investors shouldn’t overlook HSAs’ role as vehicles to save for medical expenses in retirement, when health care expenses generally rise.
Flexible Spending Account: What Is It and Should I Get One?
A flexible spending account can be used for things like medical expenses, dental care and child care. The amount you decide to contribute to the account for the year is deducted from your salary before income tax. This reduces your taxable income and saves you money on taxes. Unless you have an ongoing medical condition, some experts say flexible spending accounts aren’t the best use of your paycheck. Other experts say an FSA is useful for anyone with any level of health costs.
Just because you have health insurance doesn’t necessarily mean you can afford all your medical bills, especially if you have a high deductible. So sometimes, it pays to negotiate. Consumers may be interested to know that the amount of a medical bill is not necessarily set in stone. You can ask whether a discount can be applied, or whether the hospital has funds available for patients with a financial hardship.