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Started By
Message
Anybody else using their HSA as a retirement vehicle?
Posted on 3/22/24 at 8:05 am
Posted on 3/22/24 at 8:05 am
Apparently I was slow to learn you can take distributions for non medical expenses penalty free at 65.
That's an extra $8300 a year you can put away tax free for retirement for you young married baws.
I have refused to use any HSA funds for medical expenses since I learned this fact.
This should be talked about more IMO.
That's an extra $8300 a year you can put away tax free for retirement for you young married baws.
I have refused to use any HSA funds for medical expenses since I learned this fact.
This should be talked about more IMO.
24
Posted on 3/22/24 at 8:07 am to DiamondDog
I would like to but Braces, Dental work, glasses, the Flu, etc for the family seems to eat the money up each year
Posted on 3/22/24 at 8:10 am to DiamondDog
agreed. I have been maxing it out for quite a few years. its great
Posted on 3/22/24 at 8:12 am to LSUSports247
Sorry to hear that my man but it's understandable. I have young kids and it certainly is a sacrifice, but thats a potential another $500K over 25 years.
I'm going to try my best to keep it going. Just thought I'd share.
I'm going to try my best to keep it going. Just thought I'd share.
Posted on 3/22/24 at 8:13 am to DiamondDog
I try to max the HSA and just pay cash for current medical expenses. God willing, my family’s med bills have been low and will stay low.
Posted on 3/22/24 at 8:14 am to DiamondDog
Penalty free but not tax free at age 65 non-medical expenses from what I understand. Still a great benefit. Using it as much as possible.
Posted on 3/22/24 at 8:14 am to DiamondDog
Yes I max mine every year - HSA is triple tax advantaged it doesn't get much better than that.
Posted on 3/22/24 at 8:22 am to DiamondDog
I'll give you another good fact.
HSA accounts don't have an RMD.
But I will also give you one bad fact.
If anyone other than a surviving spouse inherits the account, it is an immediate taxable distribution in the year of inheritance, to the beneficiary.
HSA accounts don't have an RMD.
But I will also give you one bad fact.
If anyone other than a surviving spouse inherits the account, it is an immediate taxable distribution in the year of inheritance, to the beneficiary.
This post was edited on 3/22/24 at 8:25 am
Posted on 3/22/24 at 8:27 am to schexyoung
quote:
Penalty free but not tax free at age 65 non-medical expenses from what I understand. Still a great benefit. Using it as much as possible.
This, which kind of loses the triple tax benefit it has for medical expenses.
What you CAN use it to pay for is once you have medicare is medicare premiums B/C/D which is pretty sweet. You could truly have "premium free" medicare in those aspects in retirement using HSA funds to pay for that which is pretty sweet. Cant use HSA funds (tax free/penalty free) to pay for premiums up until you're on medicare at 65 or older.
Thats kind of what I'm going to use my HSA to pay for then to keep the triple tax advantage of it. We also use it as a slush fund to pay for medical expenses now but putting $8300/yr (well i put $7400, company does $900) into it we wont typically come close to spending near that much in the year on medical expenses. We only reimburse office/hospital visits not prescriptions.
Having a newborn last year has certainly wiped into it a bit though, especially with a wife who seems like shes at the dentist every other day right now
This post was edited on 3/22/24 at 8:29 am
Posted on 3/22/24 at 8:38 am to DiamondDog
Can you expand of this?
You max out your HSA and then put it into a retirement account? You aren’t required to use it on medical expenses?
You max out your HSA and then put it into a retirement account? You aren’t required to use it on medical expenses?
Posted on 3/22/24 at 8:43 am to Robin Masters
quote:
You max out your HSA and then put it into a retirement account? You aren’t required to use it on medical expenses?
When you turn 65, the penalty for not using it for medical expenses goes away.
It becomes a non-qualified distribution - which is taxable, but not penalized. That makes it similar to an IRA, etc.
Whereas before age 65, it would be taxable AND penalized.
Many HSAs allow you to invest the balance in a portfolio once you reach a certain value.
Posted on 3/22/24 at 8:59 am to DiamondDog
I contribute the max every year, but my wife goes to some sort of doctor 3 times a week it seems so I have very little carryover each year 
Posted on 3/22/24 at 9:02 am to LSUFanHouston
quote:
Many HSAs allow you to invest the balance in a portfolio once you reach a certain value.
yep I think mine forces me to keep $1000 or so in "cash" but I am free to invest the rest. have around 50K last time I looked
Posted on 3/22/24 at 9:22 am to LSUSports247
If you can afford to pay the medical expenses now out of pocket, keep funds growing in HSA and save receipts. You can use those to take withdrawals tax & penalty free later at any age.
Posted on 3/22/24 at 9:28 am to DiamondDog
Kids are getting older so last year was the first time I was able to move money to the investment side. I have it set now to move anytime time my balance gets over $2500
Posted on 3/22/24 at 9:39 am to DiamondDog
I would if I was offered a HSA.
Posted on 3/22/24 at 10:19 am to schexyoung
quote:
Penalty free but not tax free at age 65 non-medical expenses from what I understand. Still a great benefit. Using it as much as possible.
This is true, but if you save your medical receipts, you can reimburse yourself at any time for those and it will be penalty- and tax-free. The list of reimbursable expenses expanded greatly in 2020 as well, now including OTC meds, first aid supplies, etc. Even things like modifying your home for accessibility (ramps, widening doorways) qualify as reimbursable. LINK
Posted on 3/22/24 at 10:52 am to LSUFanHouston
quote:
LSUFanHouston
Ty sir!
Posted on 3/22/24 at 11:01 am to Robin Masters
Yes, max out my HSA.
Never taken a penny out of it, paid for everything out of pocket.
Never taken a penny out of it, paid for everything out of pocket.
Posted on 3/22/24 at 12:52 pm to DiamondDog
It is my understanding that if you keep the receipts for medical payments made out of pocket, you can take that money out without penalty in retirement.
I've paid everything out of pocket and have maxed mine for the last 5 years. I'm 35.
I've paid everything out of pocket and have maxed mine for the last 5 years. I'm 35.
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