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Retirement Plans - Health Savings Account

Back to: Retirement Plans in Moneytree Plan

Health Savings Accounts (HSAs) are an asset designed around helping individuals cover medical costs. They allow for both personal and company contributions. Contributions are made pre-tax. Personal contributions result in deduction to taxable income. When used for qualifying medical expenses, HSA distributions are not subject to taxes no matter when they are made. Distributions for non-qualifying expenses are subject to ordinary income taxes.

Withdrawals for non-qualifying expenses prior to age 65 are subject to 20% penalty taxes. You can have Moneytree Plan exempt penalty taxes by unchecking the box to calculate penalty taxes in Assumptions > Other. The field will show the age 59.5 for retirement plans, but also accounts for the age of 65 for HSAs.

For added flexibility, any scheduled distributions are assumed to be used for qualifying expenses even if the recognized qualifying medical expenses in other input sections does not meet the scheduled withdrawal amount.

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