: If you’re close to retirement and have a Health Savings Account, don’t make this expensive mistake

by | Mar 9, 2023 | Stock Market

Dear Ms. MoneyPeace, I am retiring this year and trying to understand Medicare. At this point I am covered fully by a company plan. I turned 65 last fall and plan to retire in August or September.  While researching, I saw a sentence about not having a Health Savings Account (HSA) while being qualified for Medicare. My company has a high-deductible insurance, so offers an HSA. Since I am on their plan, I have the HSA. Shouldn’t that be the issue when I get on Medicare, not now? 

I have never heard of this. Did I read it wrong? Could you explain it? I like having my HSA and want to keep it. — Puzzled by Medicare rules Dear Puzzled, You are not alone in your confusion. In 2013, HSA’s were designed to work in conjunction with the high-deductible health insurance plans (HDHP.) Once you are eligible for Medicare, you no longer have an HDHP. Health Savings Account contributions are disallowed when other health insurance is in place. You may use the funds in the HSA but not contribute more money to the account. (See: 2022 Publication 969 (irs.gov)) Sandy Anderson, Medicare specialist and consultant at Medicare Northeast, helped clarify this little-known glitch in retirement planning. “If they are eligible for Medicare Part A, a person can no lon …

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