HSA

Distributions from your HSA can be made at any age tax free if used for qualified medical expenses. Once you are on Medicare, however, you can no longer make contributions. 

Once you turn age 65, as Bsch4477 mentions above, you can withdraw money from your HSA account for any reason without a penalty. In order for the distribution to be tax- and penalty-free, it must be used for qualified medical expenses.

If you're enrolled in Medicare, you can still have an HSA and use it for qualified medical expenses. 

If you use the funds for other purposes, the amount withdrawn will be subject to regular income taxes.

Turning 65 doesn't change the tax-free status of your  HSA distributions used for qualified medical expenses, but it does remove the 20% penalty for non-qualified withdrawals, meaning you only pay ordinary income tax on those funds. 

You will still need to report all HSA distributions on your tax return, even if they're tax-free, using IRS Form 8889. 

Click here for "What Is the IRS Form 8889?"

Click here for more detailed information regarding HSA contributions.

Click here for "What is a Health Savings Account?"
 

You can spend HSA funds tax-free for qualified medical expenses at any age and regardless of what kind of insurance you have.  

If you are over age 65, you can withdraw funds and pay regular income tax but you are not charged the additional 20% penalty.  If you made a withdrawal in the year you turned 65, and did not use it for medical care, but you are being charged a penalty, let us know and we can research how to address that in Turbotax.

You can't make new contributions if you have "other" medical coverage (not an HDHP). Other coverage includes Medicare.  You don't have to join Medicare when you turn 65 but most people do, and whenever you do join Medicare, you are not eligible to make new contributions.  You can still withdraw funds that were previously contributed.