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3morereps
Illinois Fan
The Gym
Member since Jun 2015
4851 posts

HSA for retirement
I have been doing some research, and it appears to be a nice way to save for retirement with some access to liquidity through medical expense reimbursement.

From brief due dilligence:

Must be enrolled in qualifying HDHP to participate

Tax Deductible contributions

No income limitations

20% penalty plus income tax on non-medical withdrawals prior to 65

Exempt from 20% penalty on non-medical withdrawals at 65 (income tax would apply)- essentially a tradional IRA

Withdrawals for medical expenses are tax free anytime and one can be reimbursed for years passed

Anyone using this account to fund retirement?

My goal is to reduce current tax liabilty, cashflow medical costs and let this baby grow.

If i need funds early, i will just save receipts and be reimbursed for years passed medical expenses.

Those with experience with HSAs please feel free to add anything I left out or correct anything I am offbase with. I am just getting my feet wet with this account.



jimbeam
USA Fan
University of LSU
Member since Oct 2011
51404 posts
 Online 

re: HSA for retirement
I’ve maxed mine through HSA Bank the last few years. Still all in “cash”. Will start investing a portion within the next year or two.


PhiTiger1764
LSU Fan
Lurker since Aug 2003
Member since Oct 2009
11354 posts

re: HSA for retirement
Essentially the same plan I have. It’s an incredible tool.

1) 401k to match
2) max HSA




3) Max Roth and/or max 401k


meeple
USA Fan
Member since May 2011
5661 posts

re: HSA for retirement
Any specific reason to max the HSA first over the Roth IRA?


meeple
USA Fan
Member since May 2011
5661 posts

re: HSA for retirement
quote:

If i need funds early, i will just save receipts and be reimbursed for years passed medical expenses.

What do you mean by this?


Buckeye Fan 19
Notre Dame Fan
Member since Dec 2007
35836 posts

re: HSA for retirement
What you put into Roth is taxed income (though not taxed on withdrawal). What you put into HSA is both tax deductible income AND not taxed upon withdrawal.


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40
3morereps
Illinois Fan
The Gym
Member since Jun 2015
4851 posts

re: HSA for retirement
This is not professional advice, but my understanding is one can cashflow current medical expenses and save the receipts. Once one needs liquidity, they can access their HSA to be reimbursed for past medical expenses.


3morereps
Illinois Fan
The Gym
Member since Jun 2015
4851 posts

re: HSA for retirement
I just opened up an HSA with Fidelity, very low fees and lots of investment options. I think they even have a fearure where you can upload medical expense receipts.


lighter345
New Orleans Pelicans Fan
Member since Jan 2009
11257 posts
 Online 

re: HSA for retirement
I had an HSA but the bank had no investment options. A few months ago I moved it all to this new site Lively which is partner with TD Ameritrade. Super easy if anyone has a similar issue. They will do all the work for you in contacting the past HSA bank etc. it’s also free investing whereas some charge you a maintenance fee of some sort.


CE Tiger
Chicago Cubs Fan
Metairie
Member since Jan 2008
37918 posts

re: HSA for retirement
HSA gives you a debit card to pay your expenses.


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3morereps
Illinois Fan
The Gym
Member since Jun 2015
4851 posts

re: HSA for retirement
Okay, one could use a card associated with the HSA to pay medical expenses. They are not required to do so. I am going to use my hsa account as a vehicle to supplement retirement. Thus, cashflowing current medical expenses and not touching my HSA to enable it to grow
This post was edited on 2/10 at 1:06 pm


TigerintheNO
LSU Fan
New Orleans
Member since Jan 2004
30680 posts

re: HSA for retirement
Mine has a limit of how much you can carry over to the next year and it is under 1K


3morereps
Illinois Fan
The Gym
Member since Jun 2015
4851 posts

re: HSA for retirement
That doesnt sound right.

Are you sure youre not talking about a flex spending account or if it is through your employer maybe their contributions?
This post was edited on 2/10 at 1:34 pm


jimbeam
USA Fan
University of LSU
Member since Oct 2011
51404 posts
 Online 

re: HSA for retirement
I’m not sure what you’re referring to. HSA has no “carryover limit”.


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40
castorinho
Oklahoma Fan
13623 posts
Member since Nov 2010
55946 posts
 Online 

re: HSA for retirement
Nothing has better tax benefits out there. Nothing.
If offered by your employeer, take advantage of it. And some employers even put money in it for you. (1k single, 2k family).

Just recently started paying our medical expenses out of pocket instead of using the HSA. While that money grows.
I'll pay myself back years down the road


AnonymousTiger
LSU Fan
Franklin, TN
Member since Jan 2012
4840 posts

re: HSA for retirement
quote:

Mine has a limit of how much you can carry over to the next year and it is under 1K


This might be an HRA and not an HSA. At my company, an HRA is use it or lose it each year. HSA is yours.


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20
Volvagia
LSU Fan
Fort Worth
Member since Mar 2006
46176 posts
 Online 

re: HSA for retirement
quote:

This is not professional advice, but my understanding is one can cashflow current medical expenses and save the receipts. Once one needs liquidity, they can access their HSA to be reimbursed for past medical expenses.


This is true. And I use this attribute of the HSA as well.


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SwampBooty
LSU Fan
Sulphur, LA
Member since Sep 2015
392 posts

re: HSA for retirement
Lively almost sounds too good to be true. Tried doing quick research. I guess they make their money off of employer sponsored plans? I’m switching this year so I’m in the market. My current hsa was started last year and is in a local bank with no investment options.


3morereps
Illinois Fan
The Gym
Member since Jun 2015
4851 posts

re: HSA for retirement
Check out Fidelity, no maintenance fees that i am aware of and lots of commision free investment options. Regular stock/etf trades are minimal. I think $5


SwampBooty
LSU Fan
Sulphur, LA
Member since Sep 2015
392 posts

re: HSA for retirement
Fidelity is more than likely who I'll go with after looking around. Don't plan on using much of regular stock/etf trading anyways with an HSA.


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