But do HSAs work just as well for older Americans? The answer depends on your age.

Let?s start with someone older than 65. Once you turn 65, you are eligible for Medicare, and that means you can no longer contribute to an HSA. If you had an HSA before you turned 65, a very interesting thing happens.

The HSA, which was basically an account that could only be used for medical expenses, suddenly becomes an Individual Retirement Account (IRA). It instantly changes status when you turn 65.

This is a very intriguing concept for all of us who are younger than 65. You already know that there is no ?use it or lose it? condition for an HSA. You keep accumulating that money forever, you do not lose it at the end of each year.

So, if you?re not sick very often, you may accumulate a lot of money in the HSA. Then, once you turn 65, you can start pulling money out of it each year as income. Your withdrawals are taxable, but won?t it be nice to have another stream of income when you retire. Think of it as your ?Healthy Life Reward Account.? The healthier you are in your life, the more money you?ll have left in your HSA. It could be tens of thousands of dollars!

If you are over 55 but younger than 65, you get even more benefits for your HSA. You are eligible for something called ?catch up contributions.? This means that you can put more money into this tax-deferred account than those of us under 55.

In 2005, you can put $600 more than you health insurance policy deductible, and the amount of that catch-up contribution increases every year until it hits $1,000 in 2009. If I were you, I?d take good advantage of those catch-up contributions. Tax-deferrals are always nice to have when tax time comes around.