re: How do you handle your HSA?

Currently young and dumb so I invest it all

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I never was able to make sense of getting a high deductible hsa plan. Maybe someone can explain how these plans are better than the $300 deductible PPO plan I have

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1. You can pay medical expenses with money that's never been taxed.

2. In my case, my insurance is $60/month. The cheapest non HDP is like $150/month. I haven't used a single dollar from my HSA since I opened it 18 months ago so I'm really only "out" about $600, or the cash flow difference between what I put monthly into the HSA and the premium difference between the plans.

3. The money is triple tax advantaged at retirement

I try to keep double my out of pocket in cash. My reasoning has to do with timing. If a family member gets sick in December it can burn that years out of pocket and I would not have a cushion in January when out of pocket calculations re-set.

Thanks for the info. I’ll have to look into this when annual enrollment comes up.

I have a wife and kids and we are on a high deductible plan with HSA. I love the certainty of it. Once i hit my deductible, i'm 100% covered. With kids, I hit deductible every year, so I can pretty easily budget for health expenses each year. I max out the HSA and pull out to cover expenses as needed (not always). Not currently invested, but i intend to once the balance minimum hits a couple thousand.

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I try to never spend HSA funds and consider it some of the only income I will ever earn that is never taxed.

I actually owe a thanks to this board because there was a post a year or so ago that influenced my thinking. Specifically, it made me realize that it’s better to pay with other funds if you have the ability and let it grow tax free, serving as another retirement account.

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I think I'm going to set it to make automatic transfers at $3k for now. That will put about 2k into investments now and keep growing with contributions. I have the cash to pay for any medical expenses were I to have them, I'd only need to HSA for a true emergency.

You can move investments back into the cash account, i assume? It would just technically use principal first to avoid any tax triggering transactions?

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You can move investments back into the cash account, i assume?

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Yes, and you can pay out of pocket and reimburse yourself so I don't see the timing issue that big of a deal.

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It would just technically use principal first to avoid any tax triggering transactions?

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The beauty of it is that nothing gets taxed if it is used for qualifying expenses. Contributions go in pre-tax, everything grows tax free, and any withdrawals (contributions or earnings) are not taxed (all assuming you pull the money out for qualifying expenses). That is why it is considered triple tax advantaged which is better than most/if not all other investment options.

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I fully fund but never use. It’s tax free in and tax free out. Would rather let it grow because I’m sure I’ll need it down the road.

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I try to tell my wife this and she still insists on spending out of it. I’d much rather pay out of pocket right now and have this thing continue to accumulate growth tax free.

I put the maximum contribution in each year and kick myself for not doing this the first three years I owned it, though cash was much tighter back then.
I keep my max out of pocket in cash in my checking account.
I invest 100% of my HSA money.
I do not pay medical expenses from the account and have no intention to start doing so anytime soon, barring some major changes in my life.
I keep all my healthcare receipts. There is not currently a requirement that receipts be redeemed within any certain time frame after the expense occurred. This is a pretty crucial part to pay attention to over time. It may change.
In retirement, I'll cash out money I have receipts for capital gains and income-tax free (AFTER getting a deduction on the way in).
Money I don't have receipts for currently is pegged to grow and can currently be treated essentially like a traditional IRA.

I am currently using Lively who uses TD Ameritrade for their brokerage accounts.

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I keep all my healthcare receipts. There is not currently a requirement that receipts be redeemed within any certain time frame after the expense occurred. This is a pretty crucial part to pay attention to over time. It may change.

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Boom boom boom. May you say way-oh