Issue 10, 2025
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| In this issue: | Young adults face growing financial strain Putting an old Health Savings Account to work |
 | Young adults face growing financial strain My Penny Earned mini webinars can help. Young adult borrowers are facing a sharp increase in debt stress, driven by student loan and credit card debt. This is according to the New York Fed’s latest Household Debt and Credit Report released in early November. The report shows that overall household debt climbed to a new record of $18.6 trillion in the third quarter of 2025. While most borrowers are keeping up with payments, one group is facing outsized challenges: young adults ages 18–29. Younger borrowers’ delinquency rates have more than doubled compared with a year ago – a sharper increase than any other age group. Rising living costs, early-career wages, and heavier reliance on credit cards and auto loans are all contributing to this growing vulnerability. Holiday giving & credit cards This news arrives just as many households head into the year’s biggest spending season, suggesting yet another reason to tap the brakes on holiday spending. There’s plenty of joy to be had in both giving and receiving gifts. But November is a great time to consider how to spend with intent. Take time now to plan your holiday spending budget, then stick to it. Remember, the extravagance of a gift is less important than the love that comes with it. Getting a handle on debt stress Are you already feeling overwhelmed with debt? My Penny Earned offers a set of mini-webinars on Managing Debt and Budgeting & Financial Goals to help you de-stress your financial life. ➤ Already registered? Log in and watch the set of mini-webinars: – Managing Debt – Budgeting & Financial Goals ► Not registered yet? See your email newsletter, or the Register button above, to learn how to get started. |
 | Putting an old HSA to work Now or in retirement Subscriber Question: “I have a Health Savings Account from a previous employer. What can I do with it?” If you have a Health Savings Account (HSA) from a previous employer, the good news is simple: the account is yours to keep. HSAs are individually owned, and the funds remain available even when you change jobs or retire. This portability is one of the most significant advantages of having an HSA. You contributed to an HSA while you were covered by an employer’s high-deductible health plan (HDHP). If you retire or move to an employer with a different type of health plan, those old HSA dollars are still yours. The balance never expires, and there is no “use-it-or-lose-it” rule. ⚠ Note: Don’t confuse an HSA with a Flexible Spending Account (FSA). They’re two different animals. Using your HSA today You may use an HSA at any time for qualified medical expenses as defined under IRS rules. These can include a wide range of medical, dental, and vision costs. Distributions from your HSA for qualified expenses are tax-free, and any interest or investment earnings in the account grow tax-free as well. IRS rules also allow tax-free HSA withdrawals for a few specific insurance premiums: • Long-term care insurance (subject to IRS age-based limits). • COBRA continuation coverage. • Health insurance while receiving unemployment benefits. Using your HSA in retirement Once you reach age 65, the list expands. You may use HSA funds tax-free for Medicare Part A, B, C, and D premiums. If you use HSA funds for something other than medical expenses after age 65, the amount is taxed as income. But the 20% penalty no longer applies. Can I leave my HSA to someone? Yes. You can name a beneficiary for your Health Savings Account (HSA), but the tax treatment depends on who receives it. • Your Spouse: If your spouse is the beneficiary, the account becomes their HSA and keeps all its tax advantages. • Someone Else: If the beneficiary is anyone else, the account stops being an HSA at your death. The full balance becomes taxable income to that person in the year you pass away. • Your Estate: If your estate is the beneficiary, the HSA balance is included in your final income tax return. If you’re considering the role an HSA may play in your retirement, don’t miss My Penny Earned’s Managing Your Retirement Income series of mini-webinars. ➤ Already registered? Log in and watch the series here. ► Not registered yet? See your email newsletter, or the Register button above, to learn how to get started. |