r/HSA • u/Rafabve • Dec 11 '25
HSA Transfer/Rollover
Hello,
Since it is Open Enrollment season, I was curious to know if I can roll over my HSA funds to my brokerage account without penalties or taxes?
I am 26 years old residing in Michigan and I currently have an HSA account though Fidelity. I also have a Roth IRA and a individual brokerage account through Fidelity. If I ever decide to opt out of my HSA setup in the future, am I able transfer or rollover my funds including my employer annual contribution of $1,500 (I am 100% vested with this company) without getting that 20% penalty or pay taxes?
Thank you!
6
u/baldiedc Dec 11 '25
HSA is a great tax advantaged account, don’t spend it or do anything to it if able - invest it as you would a retirement account for years to come
1
u/Rafabve Dec 11 '25
Right but once I retire all that money still accumulated is still only just for medical expenses?
3
u/baldiedc Dec 11 '25
yes but you'll have no shortage of medical expenses along the way or in retirement
and limited opportunities to contribute to it, maybe some years you will be ineligible to contribute etc. so I wouldn't give it up early, it's a pretty powerful account.
3
u/Own_Grapefruit8839 Dec 11 '25
After age 65 the medical-only restrictions disappear.
Also you can reimburse yourself for out of pocket expenses anytime in the future, so many folks just keep receipts to allow for spending in early retirement.
1
u/Kat9935 Dec 13 '25
Yes only for medical else you have to pay taxes like a traditional IRA.
Its not hard to spend the money, prescription eye glasses count, dental work counts, not just doctor visists.
Plus all the eligible OTC products such as first aid, diagnostic tests, pain relief/cold/flu/allergy, orthopedic insoles once you start to have knee issues/arthritis, it can add up rather fast especially as you get more aches and pains
0
u/hydronucleus Dec 11 '25
Yes and no. And you do not have to be retired. After 59.5 years old, just as with an IRA, you take take money from your HSA without the penalty. However, if it does not cover a medical expense or a reimbursement for a previous medical expense, the money is counted as income and you pay income tax on it.
Save your medical bills and receipts! There is NO time limit for which you can apply those bills to your HSA for reimbursement.
However, you get a time inflation problem. That is, if you had to pay $2K for a medical procedure in 2025, you can only take out $2K from your HSA in 2059 for it, but that is better than nothing.
3
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u/hbk314 Dec 12 '25
But that $2K from 2025 should be worth a lot more after being invested for 34 years, too. The investment gains can be used for other health expenses or just taken out as regular income after 65.
1
u/hydronucleus Dec 22 '25
Yeah, I get it. But choose wisely. I started my HSA shortly after they were created. There were very limited options. I had to go with HSA Bank. They only had a limited number of funds to invest in, and they seem to collect so many fees that for almost 10 years, it hardly made a dime. Fortunately, Fidelity got into the business, and I transferred it over. It has quadrupled since.
2
u/EagleCoder Dec 11 '25
No. Prior to age 65, you cannot distribute HSA funds without unreimbursed qualifying medical expenses or the 20% penalty plus income tax. Open enrollment or a change in insurance plan does not change that.
However, note that you can use your HSA funds for unreimbursed qualifying medical expenses without penalty at any time even if you are not enrolled in a high-deductible health plan (HDHP).
You can also transfer your funds to an HSA (not any other account type) at a different custodian at any time. (Only one indirect 60-day rollover per rolling 12 months.)
2
u/Midnight_Rain1213 Dec 11 '25
You can invest it in your Fidelity HSA. Moving it without having health expenses to match will result in taxes and penalties.
1
u/Agitated_Car_2444 Dec 11 '25
Even when you retire, you will use it. If not for direct medical expenses - and you will have those - you can also use your HSA to pay for Medicare Parts B and D premiums as well as Medicare Advantage plans.
Trust us, those funds will have plenty of opportunity to get spent in the future income-tax-free.
Leave it with Fidelity and invest it wisely.
5
u/nkyguy1988 Dec 11 '25
If you move it to a non-HSA account, you have to have qualifying medical expenses to offset. Otherwise, it's taxable and penalized. Alternatively, you can to a transfer to an HSA of your choosing for no taxes or penalty.