Thinking about an HSA

[SecondCor521]

"Worst" case is that you have abnormally low healthcare expenses and amazing HSA returns; then in your 80s, you cash it out and, to the extent it exceeds your expenses, it is taxed like an IRA.

IMHO, a pretty good worst case.

Worst case is actually dying with an HSA balance. HSA balances are not treated very well at death.

It's probably fairly doable to empty the HSA before death or slightly after. There is a grace period (6 months?) after death to withdraw for final medical expenses.

 

[CDRE]

Yes, you can take it out tax free. Mark those medical receipts as used somehow, and keep them with your tax records for that year until the audit period is over.

You can also pay a lot, but not all of your medicare premiums with HSA money so that's one way to use it up.

Don't forget all of the other expenses you can use it for--dental, vision, travel to doctors, prescription drugs, things like that. IRS Pub 502 has the full list.

...And also Over The Counter medications and supplies, compliments of the 2020 CARES Act

 

[walkinwood]

For my clarification...
If you get a medigap insurance policy, do you pay for Part B & Part D separately? And those two payments and related copays etc. can be made from the HSA?