Maximize Your Healthcare Savings with a Self‑Directed Health Savings Account (HSA)

A Self-Directed HSA is a type of retirement account, managed by a custodian, that lets you invest your health savings in a wide range of assets instead of just cash or mutual funds. Since HSA funds roll over indefinitely and grow tax-free, they can serve as a powerful retirement health savings tool.

• Triple tax advantage: Contributions are tax-deductible, growth is tax-free, and qualified medical withdrawals are tax-free.
• No Required Minimum Distributions (RMDs) like IRAs/401(k)s, meaning you can let funds grow indefinitely.
• Penalty-free non-medical withdrawals after age 65, functioning similarly to a traditional IRA if needed.

• At age 65+, you can withdraw for non-medical expenses penalty-free (but regular income tax applies).
• Medical expenses are always tax-free, making HSAs a valuable tool for healthcare costs in retirement.
• Funds can be used for Medicare premiums, long-term care, and out-of-pocket medical costs tax-free.

• No, you cannot contribute to an HSA once enrolled in Medicare (typically at age 65).
• If you delay Medicare enrollment and stay on a high-deductible health plan (HDHP), you can continue contributing.

• Spouse as beneficiary: They inherit the HSA and can use it as their own.
• Non-spouse beneficiary: The HSA is liquidated and taxed as income in the year of inheritance. To minimize tax impact, consider spending down your HSA on medical expenses in retirement.

• Not keeping receipts: You can reimburse yourself later for past medical expenses, but only if you keep records.
• Investing in prohibited assets: The IRS does not allow collectibles, personal property or certain self-dealing transactions.
• Forgetting about the Medicare cutoff: If you enroll in Medicare but keep contributing to your HSA, you’ll face penalties.