I just read something that scared the FOOL out of me! Probably because I recently applied for Social Security retirement benefits, the SSA send me a publication entitled "What You Need to Know When You Get Retirement or Survivors Benefits." On page 23 is a discussion about HSAs and Medicare. The last line in that section states, "To avoid a tax penalty, you should stop your contribution to your HSA at least 6 months before you apply for Medicare" (my emphasis added to the quote).
What!? Oh, no!! I'm in deep doo-doo!
Recently, I helped a relative get set up for Medicare and Social Security. I had also been taking care of her investment portfolios, and we had been funding her individual HSA up to the month before her 65th birthday. In addition, I'm less than 6 months away from turning 65, and I'm still funding my individual HSA. I plan to apply for Medicare (the parts I'm not automatically enrolled in) before the end of the year, which means I should have stopped funding my HSA months ago!
I ran to the internet to see if there was a way to correct this terrible error on my part! Fortunately, the language used in the government pamphlet was grossly misleading, if not downright WRONG! 😡 It's bad enough that the government makes all of its programs so D--NED complicated, but to add such an erroneous command in one of its basic publications is just MEAN! 🤬
To anyone else out there who has run into this issue, I invite you to do some research, because the REAL rules are much more favorable to those of us who will go on Medicare at age 65. In short, my relative and I will be okay, and I can continue funding my HSA until the month before I hit 65.
Whew! 😳
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Rob Adams
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