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re: For you baws with HSA accounts
Posted on 10/13/22 at 12:50 pm to Im4datigers
Posted on 10/13/22 at 12:50 pm to Im4datigers
quote:
Obviously have seen plenty about them, but don’t I have to file something on an annual basis with it? I don’t just backdoor it to a Roth and put it to bed right?
I’m sure somebody here could better lay out the details, but my understanding is that it’s just a matter of contributing to a traditional IRA and then having whoever you have the account with convert it to a Roth.
My issue is a bit different as my wife’s 401k was rolled into and ira, which we will convert to a Roth, but we will have to pay taxes on it since it was all before tax money.
FWIW I don’t contribute to any IRA at the moment. I’m currently maxing my 401K and HSA… and keeping the rest after tax for shorter term goals.
0
Posted on 10/13/22 at 12:56 pm to Pelican fan99
quote:
You have to go into the system and manually invest it. Mine was the same way. Was just sitting in an account until I invested it. I had to have a $1000 balance before I could transfer it to an investment account but after it reached $1000 I set it to automatically transfer
Not sure if they are all like that but that's how mine
Yes, they’re all different. Like yours, when I had an account at Optum, it had a minimum amount which had to be kept in cash. When I rolled it to Lively, they didn’t require a minimum to be kept in cash. I rolled the Optum to Lively and then placed the entire balance in a TD Ameritrade HSA account. In that one, I can do anything from buying stocks, bonds or even trading defined risk options. It’s basically just like a self-directed IRA. I got an email from Lively today informing me that the TDA account would be rolled into a Schwab HSA account in the fall of 2023 when the integration is completed. I’ve been very pleased with Lively. Good service and $0 fees.
As for needing to upload medically related receipts, that also varies by provider. As has been said, the most important thing is that you keep your receipts in case the IRS ever comes calling. I’ve never spent any of my HSA money. But I have enough receipts to cover 100% of the account. So when I decide to start withdrawing funds, there won’t be any tax liability.
Last point for the OP: your account is portable. It’s your money. It goes with you, should you leave your employer - or even before. I have another one with my current employer. I only keep it open and active to receive the employer contribution. The rest I roll into my Lively account. So in that way, it’s not like a 401K. The only way I can roll my current 401K to a different provider is to leave my employer.
Posted on 10/13/22 at 1:41 pm to Jag_Warrior
Right now I just plan to use my employer’s account that was set up. They dump $750/year into it and then I’m contributing $250 per check (pretax) so I can max it out each year and get the tax advantage there.
Posted on 10/13/22 at 1:43 pm to Im4datigers
My employers HSA is also HSA Bank. Anybody have anything good or bad with them? Appears they are rated in the top 5 best ones?
Posted on 10/13/22 at 1:44 pm to Im4datigers
I used to use some of the funds for medical expenses.
Now it's a retirement account and we pay everything out of pocket
Now it's a retirement account and we pay everything out of pocket
Posted on 10/13/22 at 1:45 pm to FieldEngineer
quote:
Upload your medical receipts to your provider and you can reimburse yourself years down the road.
you dont even need to do that. I keep my receipts in case. but when i ask for reimbursement, they dont even ask for the receipts. Posted on 10/13/22 at 1:47 pm to Niner
quote:
To be clear, it's gotta be a qualified medical expense for it to be tax-free. Save it for retirement and it's just tax-deferred.
Yes, that is why the first part of your message is important (pay yourself later). So technically you could withdraw it for anything in retirement and refer to a previous medical expense.
Just gotta save/document everything
Posted on 10/13/22 at 1:48 pm to CarRamrod
quote:That's because "they" don't care. That's between you and the IRS, in case you get audited. So you need to have those handy always.
you dont even need to do that. I keep my receipts in case. but when i ask for reimbursement, they dont even ask for the receipts.
Posted on 10/13/22 at 1:49 pm to Niner
quote:thats the big "loophole" of these accounts. thats why people say pay out of pocket and keep receipts.
Wow, I never heard of reimbursing expenses years down the road. Did not know that was allowed. You learn something new every day.
Now if they ever decide to close the loophole and have a reimbursement expiration, then well, the account is still good, just not as good.
Posted on 10/13/22 at 1:52 pm to Im4datigers
We use ours but use so little each year we put way more in than take out so it really works way more as an investment vehicle and whenever we do have medical visit expenses it's essentially taken care of by the HSA.
So it's used as slush fund but at the same time we are putting 3x/4x/5x what we're taking out typically.
So it's used as slush fund but at the same time we are putting 3x/4x/5x what we're taking out typically.
This post was edited on 10/13/22 at 1:55 pm
Posted on 10/13/22 at 2:31 pm to Niner
quote:
To be clear, it's gotta be a qualified medical expense for it to be tax-free. Save it for retirement and it's just tax-deferred.
Which is where saving the receipts for qualified medical expenses can help.
Posted on 10/13/22 at 2:37 pm to Im4datigers
If you can afford to pay out of pocket, let HSA grow tax advantaged and get it invested.
Backdoor Roth should be simple. Your brokerage can probably answer questions. All you do is open a traditional IRA (not tax advantaged because you're over limit) and do an immediate conversion. Since it is immediate, there is no growth to pay tax on. You can also set one up for your spouse and double total contribution. I dont know of any recurring filing requirement just reporting the conversion. I've always qualified for Roth so havent done it myself. investopedia how to set up Backdoor Roth
Backdoor Roth should be simple. Your brokerage can probably answer questions. All you do is open a traditional IRA (not tax advantaged because you're over limit) and do an immediate conversion. Since it is immediate, there is no growth to pay tax on. You can also set one up for your spouse and double total contribution. I dont know of any recurring filing requirement just reporting the conversion. I've always qualified for Roth so havent done it myself. investopedia how to set up Backdoor Roth
This post was edited on 10/13/22 at 3:29 pm
Posted on 10/13/22 at 2:52 pm to Niner
quote:
Wow, I never heard of reimbursing expenses years down the road. Did not know that was allowed. You learn something new every day.
Yessir, which is why paying out it pocket and saving it is so lucrative.
Posted on 10/13/22 at 3:18 pm to Im4datigers
quote:
Do you actually use the funds every year or are you just parking the money as additional retirement since it’s pretax?
Retirement or future medical expenses. Max and invest everything over the minimum I have to keep in the cash portion.
Posted on 10/13/22 at 4:44 pm to lynxcat
I hate that you can't have an HSA with regular health insurance.
Posted on 10/13/22 at 4:55 pm to el Gaucho
I use my HSA for testosterone. Leveraged up yo
Posted on 10/13/22 at 5:47 pm to Shepherd88
quote:
hate that you can't have an HSA with regular health insurance
Well this is the first time I’ve ever done it and I’m almost 50. I usually go with the Cadillac health plan every year as it’s really all pay now or pay later. So I just always paid for the more expensive PPO plan or whatever every year.
I did the math on both this year and decided to give it (HSA plan) a try. Seemed like the Cadillac plan was costing me almost $500 more a month and if I never used it then I’m wasting that $500 every month by overpaying. The two plan deductibles weren’t crazy different anyway.
We’ll see if it was the right choice or not.
Posted on 10/13/22 at 5:57 pm to FieldEngineer
quote:
It's tax free in and out
Triple...in, growth, and out
Posted on 10/13/22 at 6:04 pm to Im4datigers
Fidelity's HSA is probably the best account option. Free and shite ton of investment options including ETFs. Can invest directly in treasurys, CDs, etc as well.
Posted on 10/13/22 at 6:24 pm to Im4datigers
quote:
I did the math on both this year and decided to give it (HSA plan) a try. Seemed like the Cadillac plan was costing me almost $500 more a month and if I never used it then I’m wasting that $500 every month by overpaying. The two plan deductibles weren’t crazy different anyway.
I ran a few quick numbers too recently… and I’m sure I’m missing something but it almost seems silly to go with the PPO over high deductible with my insurance and the ability to afford out of pocket maximums if necessary. With a discount, the PPO costs me $2,700 a year in premiums and HDHP costs me nothing, and my company gives me $750 in the HSA right off the bat.
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