Traps to Avoid When Going From an HSA to Medicare

More and more people have an HSA-eligible High Deductible Health Plan and are funding an HSA. While we love the tax benefits that the HSA offers, funding an HSA right before transitioning onto Medicare can create some tax traps. We're helping you identify those challenges and know what to do to avoid these traps on this episode of the Wise Money Show.

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Kevin Korhorn, CFP® offers securities through Silver Oak Securities, Inc., Member FINRA/SIPC. Kevin offers advisory services through KFG Wealth Management, LLC dba Korhorn Financial Group. KFG Wealth Management, LLC dba Korhorn Financial Group and Silver Oak Securities, Inc. are not affiliated. Mike Bernard, CFP® and Joshua Gregory, CFP® offer advisory services through KFG Wealth Management, LLC dba Korhorn Financial Group. This information is for general financial education and is not intended to provide specific investment advice or recommendations. All investing and investment strategies involve risk including the potential loss of principal. Asset allocation & diversification do not ensure a profit or prevent a loss in a declining market. Past performance is not a guarantee of future results.

Intro: (0:00)
Segment 1: (0:11)
Break 1: (10:19)
Segment 2: (12:31)
Break 2: (22:48)
Segment 3: (25:30)
Break 3: (35:45)
Segment 4 (37:06)
Outro: (47:20)

[KatieLibby]

I turned 65 in November. I started Part A and Part B in November. That means I had to stop HSA contributions in April, correct.

[KatieLibby]

Thanks for working hard to not get political. The 2017 tax cuts were designed to sunset and provide short term tax savings to the general public. They are part of the reason we are where we are.

[headlibrarian]

That stupid 6-month Medicare lookback really gets in the way, I don't understand why you can't opt out. Actually I do, those of us with a clue are being burned by rules designed to save the clueless, and government doesn't care about your personal circumstances.

[PorscheSpeedster-kznc]

Question: does an HSA account pass on to defined beneficiaries upon your death if you have money left in the account?

[sharoncooper]

So as soon as you turn 65 medicare part A coverage is automatic unless you opt out ?

[claire-oezt]

Hate HSA's! Yearly tax filings are ridiculous for the average person and penalties in the form of losing tax exempt status on the contributions if you terminate employment before December of the taxable year. It's really a scapegoat for employers to get out of providing responsible insurance coverage to their employees. Ridiculously complicated for the average person! Whoever came up with it had to be paid off by big business to reduce the insurance burden on employers and pass more costs to employees. Further, this product gives more incentive to insurance and drug companies to keep increasing premium and prescription drug costs!