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Message
re: For you baws with HSA accounts
Posted on 10/13/22 at 6:37 pm to Jag_Warrior
Posted on 10/13/22 at 6:37 pm to Jag_Warrior
quote:
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.
Did not know I could do this. No investment options in current account, but I will look into this as I’ve never used the account for expenses and it’s just accumulating employer contributions. Would absolutely swing a portion of my usual taxable stock account investments into this
0
Posted on 10/13/22 at 10:51 pm to Im4datigers
quote:
Do you actually use the funds
No. I pay all medical expenses in cash and keep receipts for future tax-free withdrawals. I am early career, so I’d rather long-term growth in that vehicle than cash going to taxable to grow.
quote:
Already max out 401k and AGI is too high for any Roth contribution.
Not too high for a Roth conversion.
Especially if
1) your 401k allows existing IRA roll ins
2) you have no existing IRA
so if your IRA dollars can be drawn to zero in a penalty-free manner, just go ahead and open an IRA. Make a nondeductible contributions to it. Wait 24 hours (which probably isn’t necessary), convert it to Roth.
Congratulations, you have done a Backdoor IRA which was for a while considered “questionable” because there is something called the Step Doctrine which dictates that you can’t perform legal steps (above) if the end result (Roth IRA for someone who wasn’t eligible to contribute to a Roth IRA) is not permissible.
There was an IRS clarification/publication more or less “blessing” the Backdoor IRA sometime in the last two years I believe.
There was also a tax bill that failed that would have made Roth conversions illegal above a certain AGI. Thus, last year, we did a big conversion in what was our highest grossing year yet (for fear of losing the “space” that I wanted money in).
1) My CPA is ok with it
2) financial advisor blessed/recommended it. The account is held in his institution. No red flags/alarms/etc on their end.
3) tax return was filed and accepted. I even got a letter this week saying I slightly overpaid and will be getting a small check back.
If you do have a substantial non-Roth IRA (SIMPLE/SEP/traditional) and cannot or for some reason should not roll it into your IRA, the pros/cons of a Roth conversion won’t be finally recognized until long after the time to decide to do it has passed. Congress could raise tax rates and you’ll probably win. They could lower them and you’ll probably lose. They could do away with income tax altogether and just do VAT and property taxes which would also net a loss. But I feel pretty safe/confident in making the assumption that the variable of “tax rate” will be higher in 30-60 years from now than it is today.
Signed- guy who put in a full year’s retirement contributions 3 days before the crash in 2020 and then finished maxing out retirement contributions in March of the subsequent two years, so maybe I’m not the one whose opinions on the likelihood of future events happening is worth anything at all.
But I will do the same next year, and for the next 30.
Posted on 10/14/22 at 1:35 am to Im4datigers
quote:
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?
Yeah I’ve used them. The min to invest is 1k.
Easy to scan in receipts.
Posted on 10/14/22 at 8:47 am to Theduckhunter
quote:Yeah early on my career I defaulted to the PPO.
but it almost seems silly to go with the PPO over high deductible with my insurance
But then I actually did a spreadsheet and compared the options. The results were shocking, and fit the part of your message that I quoted.
For my company family plan there's literally no scenario where you come out ahead using PPO. None.
And the analysis I did did not even account for the tax benefits.
For the single plan, there's a short window of total medical expenses where PPO would be superior (if your total medical expenses are between $3500 and $5000, you would have been better off with PPO. But outside that window a CDHP wins).
Now the big driver here is the plan structure (premium difference, deductibles etc), and the company contribution. So that's going to vary from one to another, but in my case yeah it is silly to go with the PPO. I've converted a few co-workers over the years.
Posted on 10/14/22 at 11:27 am to Im4datigers
I wish I could save. I have drained it every year since 2018. Also, it is very nice to be able to spend it on eligible things. Figure out what you can use it with and it becomes very valuable.
2018 Premature birth + nicu stay end of year + beginning of 2019
Was able to delay some payments into 2020. 0 by end of year
Was building it back up until I broke my finger in late 2021. Surgery and long therapy. Back to 0 by early 2022
I reload Jan 1 every year. I would like to have to reload Dec 31. Gonna be a while until that happens again
2018 Premature birth + nicu stay end of year + beginning of 2019
Was able to delay some payments into 2020. 0 by end of year
Was building it back up until I broke my finger in late 2021. Surgery and long therapy. Back to 0 by early 2022
I reload Jan 1 every year. I would like to have to reload Dec 31. Gonna be a while until that happens again
Posted on 10/14/22 at 3:34 pm to armsdealer
quote:
I hate that you can't have an HSA with regular health insurance.
Or with cost sharing plans (that have the same basic deductibles as HDHPs). There was a push to address that discrepancy a couple of years ago, but it appears the insurance industry paid off the right people and it went nowhere.
Posted on 10/14/22 at 3:41 pm to wizard of smart
quote:
2018 Premature birth + nicu stay end of year + beginning of 2019
I pray that things are going OK now.
Posted on 10/16/22 at 1:21 pm to Im4datigers
It’s a retirement account for me. It’s swung from about 39k to 28k due to the market.
Posted on 10/17/22 at 9:39 am to BenDover
The HSA i have with my employer has a minimum of 1k before eligible to invest
Posted on 10/17/22 at 11:19 am to FieldEngineer
Can HSA funds be used to pay health insurance premiums or only the actual expenses?
Posted on 10/17/22 at 11:57 am to Klondikekajun
quote:
Can HSA funds be used to pay health insurance premiums or only the actual expenses?
It can be used for cobra or medicare premiums and some long term care plans.
Posted on 10/17/22 at 1:38 pm to austin2015
quote:
Yeah I’ve used them. The min to invest is 1k. Easy to scan in receipts.
I just reimbursed for an expense for the first time and they didn’t even ask for receipts or what the services were. Kinda feels sleazy. I’ve got receipts and figured they would need to at least approve it.
I paid for the hospital bill for the newborn’s childbirth. Which from what I have read is fine to use HSA funds for, but I would’ve liked them to verify. Nope check showed up a few days later.
I just transferred majority of the funds to invest. Just haven’t decided on what to invest in. I have decision paralysis pretty bad.
This post was edited on 10/17/22 at 1:43 pm
Posted on 10/17/22 at 2:29 pm to Lazy But Talented
quote:the hsa itself isn't there to regulate that.
I just reimbursed for an expense for the first time and they didn’t even ask for receipts or what the services were. Kinda feels sleazy. I’ve got receipts and figured they would need to at least approve it
When you are filing your taxes, you'll get a from them. When you fill that in, then ask you if you used it for medical expenses or not. Even then you don't need to prove what did with it.
However, if you answer yes, and happen to get audited you better have those saved up.
Posted on 10/17/22 at 2:53 pm to castorinho
That makes sense. Thanks.
Posted on 10/17/22 at 2:55 pm to Lazy But Talented
quote:
I just reimbursed for an expense for the first time and they didn’t even ask for receipts or what the services were. Kinda feels sleazy. I’ve got receipts and figured they would need to at least approve it.
If anyone asks for receipts, it will be the IRS. What I do is keep a spreadsheet of medical expenses over $50. I'll get a pdf copy of the bill/eob and the credit card stmt showing where I paid it and save these.
I do this once a year as part of my annual taxes.
I'll add the spreadsheet and receipts to an archive where I keep all my prior tax returns, 1099s, W2s, etc.
Posted on 10/17/22 at 3:15 pm to ArkBengal
quote:
Since it requires a high deductible health plan, we typically spend the HSA funds plus some out of pocket each year. Max contribution is only $3,650 this year plus an additional $1,000 if over age 55. That doesn’t go far these days unless you are young with little medical expenses.
You're saying "we" but citing the single person HSA max contribution. If your high deductible insurance plan covers a spouse and/or children, you have a family plan and the max 2022 HSA contribution for family plans is $7,300 for families, plus $1000 more if you're over 55.
Posted on 10/17/22 at 3:30 pm to Lightning
So let me get this straight -
I’m 49, if I contribute now until 65 and never touch it, I can start withdrawing tax free for any single medical expense I have between 49 and 65 so long as I keep copies of the receipts? And of course barring any change in laws/regs during that time.
So if I roll up at age 65 with $100k of medical bills or supplies (receipts saved) between age 49 and 65, I can then take a lump sum $100k tax free then?
What am I missing?
I’m 49, if I contribute now until 65 and never touch it, I can start withdrawing tax free for any single medical expense I have between 49 and 65 so long as I keep copies of the receipts? And of course barring any change in laws/regs during that time.
So if I roll up at age 65 with $100k of medical bills or supplies (receipts saved) between age 49 and 65, I can then take a lump sum $100k tax free then?
What am I missing?
Posted on 10/17/22 at 3:39 pm to Im4datigers
quote:
What am I missing?
So long as you are able to pay those $100k of medical expenses out of pocket during that time, you aren’t missing anything.
Posted on 10/17/22 at 4:35 pm to PhiTiger1764
quote:
So long as you are able to pay those $100k of medical expenses out of pocket during that time, you aren’t missing anything.
And you don’t even have to wait until 65, right? As long as you’re reimbursing yourself for a qualified medical expense?
Posted on 10/17/22 at 5:06 pm to Theduckhunter
quote:
And you don’t even have to wait until 65, right? As long as you’re reimbursing yourself for a qualified medical expense?
This is true but the benefit of waiting is the tax free gains. If you get reimbursement then your tax free gains have stopped. If you put that money back into the market any future gains will be taxed as normal. In general the longer it stays invested in the HSA the larger the tax free gains.
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