Skip to main content
Publish date:

Ask Bob: Can I Rollover Money in My IRA or 401(k) to an HSA?

Adviser Thomas Haunty explains how to roll over money in an IRA into your health savings account or HSA. This strategy does, however, have limitations.

Question

Is a rollover from an IRA or 401(k) allowed into a health savings account?

Answer

Yes, this is called a Qualified HSA funding distribution, says Thomas Haunty, a senior partner and team leader with North Star Resource Group - The Haunty Team.

"You can roll over your traditional or Roth IRA money -- though not your pre-tax or Roth 401(k) -- into your health savings account (HSA)," he says. "However this strategy has limitations."

One limitation is that you can only do one such rollover in your lifetime and you can only roll over up to the annual HSA contribution limit allowed, says Haunty.

"The contribution amount depends on your age and the high deductible health plan, or HDHP, the type you have -- self-only or family," he says. "Self-only coverage is $3,500 per year, $7,000 for family and if you are age 55 or older you can contribute an extra $1,000."

You must also be an eligible individual who qualifies for an HSA for 12 calendar months after the distribution and the distribution must be made directly by the trustee of the IRA to the trustee of the HSA, says Haunty. "This rollover also reduces the amount you can add to the HSA that year and must be completed by the end of the calendar year, not by your tax filing deadline."

Read IRS Publication 969 (2018) and IRS Publication 590-B.

Got questions about the new tax law, Social Security, retirement and/or investments? Email Robert.Powell@TheStreet.com.

Question

Is a rollover from an IRA or 401(k) allowed into a health savings account?

Answer

Yes, this is called a Qualified HSA funding distribution, says Thomas Haunty, a senior partner and team leader with North Star Resource Group - The Haunty Team.

Member Exclusive

Get Access to Our Exclusive Content