What happens if I want to withdraw the money for nonmedical expenses after age 65?
You won’t be hit with the 10% penalty if you use the money for nonmedical expenses after age 65, but you would still have to pay income taxes on the money. Keep in mind that you can continue to withdraw money from the account tax-free for qualified medical expenses after the age of 65. Can a couple who is planning to retire early open an HSA? Absolutely. Any South Carolina resident under the age of 65 can contribute to an HSA if he or she buys a South Carolina high-deductible health insurance policy. You can also contribute an extra $1,000 in 2009 if you’re 55 or older. You can’t make new HSA contributions after age 65, but you can still use the money in your account tax-free for medical expenses at any age. You’ll owe income taxes on the money but no penalty if you withdraw the money for nonmedical expenses after age 65. Do contributions to a South Carolina HSA in any way affect one’s ability to contribute to an individual retirement account? No. Your South Carolina HSA contributions
