Here are 3 myths about HSAs for Retirement . If you don’t spend the funds, you’ll lose them 👉🏼Even though there is an annual limit to the amount you can contribute each year, there isn’t a set amount you’re required to withdraw annually from an HSA. You don’t need to take distributions from the account. If you’re in a solid financial position, you might opt to pay for medical expenses with cash on hand. You can let the balance ride into retirement to cover your health care costs in retirement . The HSA balance is just like cash 👉🏼When you place funds into an HSA, the amount can be withdrawn for medical costs. What you don’t use can be invested. Many plans allow an investment option. If you’re going to pay for medical expenses out of cash flow, investing the money smartly could enable the account to grow over time. If you’re not sure what your plan offers, ask your employer or an advisor to help you understand the details. You might be able to invest unused funds in mutual funds or stocks . Taxes will be a problem 👉🏼HSAs offer numerous tax advantages. Money contributed to a HSA is tax-deductible, and your investments grow tax-free. If you use the money for a qualified medical expense, you can also withdraw your money tax-free. However, the money will be taxed if you withdraw it for a reason that is not a qualified medical expense. If you’re under age 65, you’ll also need to pay a penalty for funds taken out for non-qualified medical expenses. After age 65, funds that are used toward medical expenses will not be taxed. If you're over age 65 and withdraw money from the account for non-medical costs, the amount will be taxed.