Be careful if contributing to an HSA while on Social Security

Sarah O’Brien of CNBC writes an important and informative piece here for those that regularly contribute to a health savings account (HSA) and plan to tap Social Security past full retirement age.  Folks must be careful not to run afoul of the rules on improper contributions.  While many know you can no longer contribute to an HSA once on Medicare, the complication arises for people who delay both Social Security and Medicare.  When you delay claiming Social Security beyond full retirement age, you’re generally offered a lump sum in retroactive benefits of up to six months.  If you’re not yet on Medicare when that happens and are contributing to an HSA, there’s a potential for issues because taking the lump sum from Social Security triggers Medicare Part A being effective retroactively.  This creates an improper contribution.  Read O’Brien’s full piece here on how to handle the issue.




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