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403(b) to Health Savings Account

TA | December 11, 2007

Q: I am looking into an HSA. I read that you can transfer an IRA into an HSA on a one-time basis. Would that also apply if you had a 403(b) is a public School (PA.) retirement plan?
 

A: This tax-free provision of tax law only applies to regular Individual Retirement Accounts (IRA). To achieve the tax-free transfer to a Health Savings Account (HSA), you must do this as a two-step transaction. Step 1- rollover the 403(b) to an IRA, Step 2- transfer the IRA to your HSA. Your IRA administrator and/or  HSA administrator (depending on which companies you use) will handle this two step transaction at no additional cost to you. Any of the big national HSA administrators listed at www.healthsavingsaccount-hsa.com can provide additional assistance with the transaction.

 


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