Liz Weston: A year-end money checklist for people 50 and up | Lifestyles

To contribute to an HSA, the account owner must have a qualifying health insurance plan with an annual deductible of at least $1,400 for individual coverage and $2,800 for family coverage. People on Medicare cannot contribute to an HSA, but they can withdraw money tax-free from an HSA to pay medical expenses, including Medicare premiums, deductibles and copayments, Luscombe says.


Money can’t stay in retirement accounts indefinitely, says certified public accountant Mary Kay Foss, a member of the American Institute of CPAs’ individual and self-employed tax committee. Withdrawals must begin at some point, typically age 72. If you miss a deadline or withdraw too little, you could face a tax penalty equal to 50% of the amount you should have withdrawn but didn’t. Your retirement fund or brokerage can help you calculate the appropriate amount, or you can use the tables in IRS Publication 590-B.

The IRS specifies the minimum you need to take each year based on your Dec. 31 account balance for the prior year. Your required minimum distribution for 2021, for example, will be based on your Dec. 31, 2020, balance.

You must typically take your distributions by the end of the year, although you can delay your first RMD until April 1 of the year after you turn 72. If you delay, you’ll have to take your second RMD by the end of that year, Foss says.

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