Funding an FSA or HSA using 401(k) or IRA funds pr...

Content starts here

CLOSE ×

AARP MEMBERSHIP — $12 FOR YOUR FIRST YEAR WHEN YOU SIGN UP FOR AUTOMATIC RENEWAL

Get instant access to members-only products and hundreds of discounts, a free second membership, and a subscription to AARP the Magazine.

Join Now

Renew Now

You're this close to getting so much more ...

Get access to this and all Members-Only discussions, plus a world of member Benefits when you Join AARP!

Become an AARP Member for $12 Already a member? Login >

Members Only

My Settings Guidelines

Funding an FSA or HSA using 401(k) or IRA funds pre-tax

I am retiring in a month and have been told I won't be eligible anymore for the FSA that my company currently has and I've used for many years. While I fully expected that, it did get me thinking. Why hasn't the Governmant allowed retired people to fund a FSA or HSA using 401(k) or IRA funds pre-tax? It seems odd that at a time where my medical spending will rise and my income falls, I do not have the option to pay for any medical expesnes pre-tax as I did while employed.

In order to pay $10,000 in Medical bills, I have to cash in $13,000 of my 401(k). For medical expenses to be tax deductible, they'd have to be astronomical and only those expenses in excess of 10% our AGI can we even start deducting them. With an FSA the savings start with the first dollar spent.