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By Ryan Kennelly

July 8, 2017

Topics:

  • HSA Plans
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Can I convert an HSA account to an IRA? What are the pros/cons?

July 8, 2017

  • HSA Plans

No, there’s no way to convert an HSA to an IRA. And there’s really no advantage to doing it, anyways. Both IRAs and HSAs allow you to deposit money into them before taxes. Your total yearly contributions to either type of account are deducted from your income before the taxable amount is computed. In addition, both accounts grow without taxes.

But the real difference between an HSA and an IRA is that the funds in an HSA can be used at any time tax-free to pay for qualified medical expenses – things like health insurance plan deductibles, holistic care, etc – which is not true of an IRA. If you withdraw funds from your HSA to use for any other purposes before age 65 you’ll pay taxes on them, as well as a penalty. After age 65, you won’t, so at that point it works just like any other retirement account – IRAs included.

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