Health savings accounts can be a valuable tool for covering medical expenses and saving for the future — but understanding the rules around them can be tricky.
In a recent episode of the "Women & Money" podcast, Suze Orman answered a listener's question about whether he could save his medical receipts until age 65 to reimburse himself for medical expenses from his HSA all at once.
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Can You Save Medical Receipts and Reimburse Yourself Later?
James, a 58-year-old listener, reached out to Orman with a question about his HSA. He explained that he has $80,000 saved in the account and prefers to pay for his current medical expenses out-of-pocket. His plan is to allow his HSA funds to continue growing tax-free and then reimburse himself at age 65. He asked Orman if this strategy would work and whether the expenses would “expire” if he waited until retirement age to submit them.
Orman confirmed that James's approach is valid — but he doesn't have to wait to reimburse a qualified medical expense tax-free. "He doesn’t have to wait till age 65, just so you know," Orman said. "He can do it any time he wants."
HSA rules allow you to reimburse yourself for qualified medical expenses at any time, as long as you have saved the receipts.
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How HSAs Work for Medical Reimbursement
Orman explained that HSAs are designed to offer tax-free growth and withdrawals for qualified medical expenses. If you pay for medical expenses out-of-pocket instead of using your HSA, you can save the receipts and submit them for reimbursement whenever you choose — even years down the road.
This is known as the “shoebox technique.” You keep track of your medical expenses by storing receipts, similar to keeping them in a shoebox. Later, you can submit them to your HSA provider and withdraw the funds tax-free, as long as the expenses were qualified.
Orman emphasized that you don’t need to wait until age 65 to use this strategy. You can reimburse yourself at any time for past qualified medical expenses, even if you incurred them years earlier.
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What Changes After Age 65?
While you don't have to wait until age 65 to reimburse yourself for medical expenses, some rules do change after that milestone.
This flexibility makes an HSA a powerful savings tool for both medical expenses and retirement planning.
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The Benefits of Letting HSA Funds Grow
Paying for current medical expenses out-of-pocket and allowing the HSA balance to grow gives James an advantage of the account's tax-free growth potential. HSAs offer a few tax benefits that many find useful:
James's plan to let his HSA grow and reimburse himself later is perfectly legal — and potentially beneficial. Orman confirmed that qualified medical expenses can be reimbursed at any time, not just after age 65. Keeping track of medical receipts using the shoebox technique could help HSA holders like James make the most of their savings and benefit from tax-free growth over time.
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This article 58-Year-Old With $80,000 HSA Pays For Medical Expenses Out-Of-Pocket To Reimburse At 65 Years Old – Suze Orman Says He Doesn't Have To Wait originally appeared on Benzinga.com
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