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This Web site contains a compilation of more than a thousand consumer finance  columns written by Tony Novak from the 1980s through 2006, updated and reformatted for maximum usefulness today.  New material was added after 2010.

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IRA to HSA transfer

originally posted: 11/22/2006  reposted: 2/18/2011 This post has not been recently reviewed or revised by the author and may be out of date. If you notice an error or are in doubt, please send a new question by email or ask for an update. Email

Q: Would an IRA to HSA transfer be beneficial to someone who is not presently taking distributions from a taxable IRA to take money out tax free and also get a deduction for the HSA contribution if that person expects to be in a high tax bracket when she must begin taking distributions?

A: Yes. There is no indication that the one time transfer would have any significant impact on future IRA distributions but there is a clear likelihood that the HSA would give a greater tax advantage than the IRA. In most cases that distributions from an HSA are tax free whereas normal distributions from an IRA are taxable. Also note that there are not likely any tax implications for an IRA to HSA transfer. In other words, there is no additional deduction allowance as indicated in your question. However, at the time this question was posted, the procedures for IRA to HSA transfers are not yet established so we might need to revise our advice in the future.


More resources:

Planning an IRA to HSA transfer