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Message
re: Anybody else using their HSA as a retirement vehicle?
Posted on 3/22/24 at 1:24 pm to DiamondDog
Posted on 3/22/24 at 1:24 pm to DiamondDog
I'm jealous of you folks who have kids and a wife and can max out all of your retirement vehicles.
Cheers.
Cheers.
Posted on 3/22/24 at 2:50 pm to Lightning
quote:
now including OTC meds
The IRS.gov site you linked states…
quote:
Nonprescription Drugs and Medicines Except for insulin, you can't include in medical expenses amounts you pay for a drug that isn't prescribed.
Posted on 3/22/24 at 3:02 pm to DiamondDog
Been maxing and investing it for years.
You can also do this:. I take a photo of any medical or prescription expense we incur and file it straight to a Google drive folder. Whenever I need that $ for anything in the future (college expenses, retirement etc), I’ll be submitting those old receipts for reimbursement to help fund these things (if I don’t use it for medical $ first).
ETA:
quote:
take distributions for non medical expenses penalty free at 65.
You can also do this:. I take a photo of any medical or prescription expense we incur and file it straight to a Google drive folder. Whenever I need that $ for anything in the future (college expenses, retirement etc), I’ll be submitting those old receipts for reimbursement to help fund these things (if I don’t use it for medical $ first).
ETA:
quote:and what he said
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.
This post was edited on 3/22/24 at 3:06 pm
Posted on 3/22/24 at 3:27 pm to DiamondDog
I did the math when I was shopping plans. By my numbers, everything has to be perfect. I would have to be making high 6 figures at the least every single year, and have an expected rate of return of 10% each year. Otherwise, you save considerable amounts of money with a non HSA plan.
The point of an HSA plan is to no use the money for medical expenses. It is meant to be used as a pre-tax retirement account. If you have to spend the money out of it, you are wasting money.
I ran the numbers on non HSA plans. The amount of money each month for basically protection against the hospital ripping you off is ridiculous. I decided to go with Medishare. But thats a whole different topic I guess.
The point of an HSA plan is to no use the money for medical expenses. It is meant to be used as a pre-tax retirement account. If you have to spend the money out of it, you are wasting money.
I ran the numbers on non HSA plans. The amount of money each month for basically protection against the hospital ripping you off is ridiculous. I decided to go with Medishare. But thats a whole different topic I guess.
Posted on 3/22/24 at 3:55 pm to DiamondDog
I’ve been using mine for medical expenses. Should I not be doing that?
Posted on 3/22/24 at 4:08 pm to TorchtheFlyingTiger
quote:
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.
I have a folder in Google Drive for this.
Posted on 3/22/24 at 4:51 pm to Volt
That's because I linked the wrong form. I previously linked Pub 502, should have been Pub 969, which states:
LINK
quote:
Amounts paid after 2019 for over-the-counter medicine (whether or not prescribed) and menstrual care products are considered medical care and are considered a covered expense.
LINK
Posted on 3/22/24 at 7:51 pm to Lawyers_Guns_Money
It’s an interesting thought but you might actually be better served to even pay medical bills on a credit card and carry interest instead of using those tax advantaged funds. Strange to even think of that scenario but it may actually be that valuable of dollars.
To be clear, triple tax advantaged is THE BEST savings vehicle in the entire tax code. The only dollars that don’t ever get taxed.
To be clear, triple tax advantaged is THE BEST savings vehicle in the entire tax code. The only dollars that don’t ever get taxed.
Posted on 3/22/24 at 10:10 pm to DiamondDog
Yes, balance is mid 50's today. God willing, will make it to retirement without having to use it.
Posted on 3/23/24 at 12:34 am to Celery
quote:
I’ve been using mine for medical expenses. Should I not be doing that?
If you can afford to pay the expenses out of pocket, it can make sense to let it grow in the HSA. That's what I'm doing.
I've been tracking eligible expenses for several years. I've already got 12k that I can reimburse myself at any time tax free.
Imo after a company 401k match, the HSA is even more valuable than a Roth IRA. It's the only investment vehicle that offers tax deductible contributions, tax deferred growth and tax free withdrawals for medical expenses. Nothing else is triple tax advantaged like the HSA.
This post was edited on 3/23/24 at 12:35 am
Posted on 3/23/24 at 7:32 am to DiamondDog
I don’t take distributions from my HSA even though as a Type 1 I could clear the account out. I let it grow and never touch it.
Posted on 3/23/24 at 7:33 am to DiamondDog
I'm having trouble finding the answer to this question, does anyone know?
I'm also paying out of pocket for routine medical expenses and saving receipts to make future claims from my HSA. Some of these expenses are for dependents who are currently covered under the plan. However when I make a claim for reimbursement at some point in the distant future, they will no longer be my dependent. Does that matter?
I'm also paying out of pocket for routine medical expenses and saving receipts to make future claims from my HSA. Some of these expenses are for dependents who are currently covered under the plan. However when I make a claim for reimbursement at some point in the distant future, they will no longer be my dependent. Does that matter?
Posted on 3/23/24 at 8:16 am to Grifola
Speaking of dependents, of my kids are on my wife's HMO plan, can I use you my HSA funds on my kids? I guess this example fits what I'm asking
quote:
Any HSA eligible dependents you claim on your tax return (your children, or a qualifying relative dependent) and any children who are claimed on your ex-spouse's tax return
Anyone you could have claimed as a dependent, but weren't able to because he or she filed a joint tax return (for example, your married teenage kid who files a joint return with his or her spouse) earned more than $4,700 (in 2023), or you (or your spouse, if you file jointly) could be claimed as a dependent on someone else's tax return
Posted on 3/23/24 at 8:36 am to DiamondDog
With a wife and two teenage boys I fund to the max and just hope to have something roll over.
Posted on 3/23/24 at 8:38 am to gpburdell
quote:
Imo after a company 401k match, the HSA is even more valuable than a Roth IRA. It's the only investment vehicle that offers tax deductible contributions, tax deferred growth and tax free withdrawals for medical expenses. Nothing else is triple tax advantaged like the HSA.
That’s why I love this board. This never even crossed my mind. Kudos.
Posted on 3/23/24 at 10:13 am to LSUFanHouston
quote:
If anyone other than a surviving spouse inherits the account, it is an immediate taxable distribution in the year of inheritance, to the beneficiary.
I believe the beneficiary has up to 12 months to submit requests for reimbursement of qualified medical expenses, and if the owner was keeping good records, they could conceivably eliminate the entire taxable balance.
Posted on 3/24/24 at 6:08 pm to SquatchDawg
quote:
two teenage boys I fund to the max and just hope to have something roll over.
Mine just got braces, which wiped out 100% of the balance (fund to the max,) they're pre-teens. But, too many look at an MSA when their kids aren't two years into elementary school and panic about the costs with a high deductible plan. They don't realize that between 2nd grade and braces, the costs will be extremely low unless your wife/ex-wife is a hypochondriac with the kids. Once the braces are done with, you're saving money for your shoulder replacement, the bridges you'll eventually need, etc.
Posted on 3/25/24 at 11:49 am to GrizzlyAlloy
I have a HSA I get from my company but it does not allow me to do anything but put cash into it
Is there a way I can invest with the money like an index fund ?
Is there a way I can invest with the money like an index fund ?
Posted on 3/25/24 at 12:20 pm to Baylor
You do not have to use the HSA your company tells you to use. It is not like with a 401k. Open a HSA account with one of the major brokers, and instruct your company’s payroll that HSA funds are to go there. Roll over whatever you have now into that account. Then trade how you want to.
Posted on 3/25/24 at 12:58 pm to lynxcat
quote:
It’s an interesting thought but you might actually be better served to even pay medical bills on a credit card and carry interest instead of using those tax advantaged funds. Strange to even think of that scenario but it may actually be that valuable of dollars.
This is the kind of stuff I like to think about, but I’m struggling to put together some example scenarios to show this mathematically.
Do you have anything?
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