What Will Happen to Your HSA if You Quit Your Job?
If you have a Health Savings Account (HSA) through your job, you may be wondering what will happen to it if you quit. An HSA is a type of savings account that allows you to set aside pre-tax money to use for qualified medical expenses. Here is what happens to your HSA when you leave your job:
Leaving money in the HSA
You can choose to leave money in your HSA account even after you quit your job. Your employer will close their portion of the account and you will no longer be able to make contributions to the account. However, you may continue to use the balance for qualified medical expenses.
Moving money to a new account
If you want to continue making contributions to an HSA, you can open a separate HSA at a financial institution. You can then transfer the funds from your employer’s HSA account into the new HSA. This transfer can typically be done quickly and easily, and some employers will even assist you with the transfer.
Pros and Cons of Moving Your Bank
If you do decide to open an HSA at a new financial institution, there are some pros and cons to consider. Here are some of the advantages:
- Low Fees: Some financial institutions may have lower fees for their HSAs than your employer does.
- More Options: You may find different investment options if you switch financial institutions.
- Keep Savings: You will keep your existing balance and continue to accrue interest on the money.
On the other hand, there are a few disadvantages to be aware of:
- Fees: There may be fees associated with opening and managing a separate HSA.
- Portability: You may not be able to move the account to a new employer if you decide to switch jobs.
Conclusion
While it is important to consider the pros and cons of leaving money in an existing HSA or transferring it to a new financial institution, it is ultimately up to you to decide what is best for your financial situation. Ultimately, you may find that moving your money to a new account is the most beneficial decision for you.