whoisjohngalt
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Post by whoisjohngalt on Jan 13, 2017 13:59:34 GMT -5
This is our third year of being able to contribute to HSA.
If I did $5K/ yr for the next 20 yrs, I could have $100K for premiums and drugs once I get old and sickly. But the cynical, skeptical and paranoid side of me keeps wondering if it makes sense - so much can change between now and then.
Right now, rules are very very lax. You don't have to submit any real proof that you are using $$$ for medical purposes.
But as FSA got much stricter rules over the years (you can't buy anything over counter), I am worried that $$$ in HSA will have all kinds of limits and restrictions in the future. And not everyone needs $100K for medical stuff, right?
So, what do you do- use it now or save it as your "medical 401K"?
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Deleted
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Post by Deleted on Jan 13, 2017 14:00:34 GMT -5
No. I consider it more retirement.
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Deleted
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Post by Deleted on Jan 13, 2017 14:04:34 GMT -5
Even if you don't use it for ANY medical stuff, it will work just like a Traditional IRA. You get the tax deduction going in, grows tax-free and you won't pay any penalties on it after 59 1/2. The bonus of using it for medical is no tax going out. Triple tax savings. The ultimate retirement savings.
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tractor
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Post by tractor on Jan 13, 2017 14:05:04 GMT -5
We use our HSA all the time as it came with a high deductible health insurance plan at work. Our annual deductible is $2,600, and my wife and I burn through that pretty fast (one prescription is almost $700/mo). I've been told the one advantage to accumulating $ in one is that you can use it for things like nursing home care and/or long-term care issuance when the time comes.
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whoisjohngalt
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Post by whoisjohngalt on Jan 13, 2017 14:07:13 GMT -5
We use our HSA all the time as it came with a high deductible health insurance plan at work. Our annual deductible is $2,600, and my wife and I burn through that pretty fast (one prescription is almost $700/mo). I've been told the one advantage to accumulating $ in one is that you can use it for things like nursing home care and/or long-term care issuance when the time comes. Yeah, we have pretty high deductible as well, but have been paying it outside of HSA. One side of me is so so tempted not to touch HSA, but the paranoid side of me thinks that I will get screwed at the end.....
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raeoflyte
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Post by raeoflyte on Jan 13, 2017 14:14:44 GMT -5
If I could afford our medical expenses on top of funding our HSA, I would totally do that. But I can't, so we spend money out of the HSA as quick as it goes in and are just grateful for the tax savings.
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Tiny
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Post by Tiny on Jan 13, 2017 14:39:02 GMT -5
An HSA wasn't available to me until I was 51, and then of course after decades of no health issues - I had health issues and got to my deductible very quickly. But, I just paid out of pocket - the deductible is 1300.00. The second year, I had another new round of health issues - but only about $500 out of pocket. I'm having surgery in 2017 so I'm sure I'll hit the deductible (and whatever else again as well... but the surgery should be the end of my issues -I plan to pay out of pocket for any expenses. I'm hoping 2018 will be a year free of OOP health care costs.
My original plan for the HSA money was that I wouldn't use it right away (because up until I signed up for it - I NEVER had a health issue that required doctors/tests/procedures/surgery). I'm still sticking with that plan because the $$ in the HSA should grow (some atleast) and I'd like to "retire" early - so I may need $$ to pay for health insurance...
(FWIW: between the $$ my employer contributes to the HSA AND the pretax break AND the lower over all cost of the HDHP - I paid about the same amount out of pocket for health care (the $1300 + 500 over two years) as the old plan. But with the benefit that I've managed to sock away 6K to date that's tax free going in with the added benefit of tax free coming out. Got it invested so it's growing... I'm hoping to have WAY more than the 15,000 I expect to be able to contribute to the plan (3K contributions for 5 years) by the time I get around to using it.
Also, I could have contributed the 3K to my 401(k) - because I'm hitting the 18K limit BUT not the extra 5K for being over 50. I figured the 3K to the HSA was a way to 'diversify' my retirement money - since I would have just put the 3K into my 401(k) if the HSA wasn't available.
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Deleted
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Post by Deleted on Jan 13, 2017 14:41:29 GMT -5
In September, 2012 I started at an employer with an HSA-eligible plan. DH needed an endoscopy and it was then that I discovered that with a deductible of $1,250 per person and max out-of-pocket of $2,500, one person's expenses could hit $2,500 before the insurance started paying, at least under that plan. The doc ordered a follow-up endoscopy in January. Ouch. So, the money went out almost as fast as it went in.
After that I quit withdrawing form it even though I later needed two dental implants. It's at $15,00 now and I probably won't be able to add anything else- this year I wasn't able to find an HSA-eligible policy except ones with ZERO out-of-network coverage. Early next year I'm eligible for Medicare.
Not sure when I'll spend that $15K. Our Federal taxes for 2015 (my first full year of retirement) were zero but for 2016 I'll owe around $8K Federal due to investment results, so there will be future years when it might come in handy.
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whoisjohngalt
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Post by whoisjohngalt on Jan 13, 2017 14:44:20 GMT -5
This is our third year of being able to contribute to HSA. If I did $5K/ yr for the next 20 yrs, I could have $100K for premiums and drugs once I get old and sickly. But the cynical, skeptical and paranoid side of me keeps wondering if it makes sense - so much can change between now and then. Right now, rules are very very lax. You don't have to submit any real proof that you are using $$$ for medical purposes. But as FSA got much stricter rules over the years (you can't buy anything over counter), I am worried that $$$ in HSA will have all kinds of limits and restrictions in the future. And not everyone needs $100K for medical stuff, right? So, what do you do- use it now or save it as your "medical 401K"? you're also ignoring the compounding benefit According to my Phil Script, a yearly investment of $5,000.00 bearing an annual return of 11% could grow to $356,325.72 in 20 years! the first year we had it, i just used it. since then, i max it out, invested in broad index funds, and pay for medical OOP How do you do that? I don't even know where the money is kept right now, how do I get it out and invest it? Vanguard people told me that they don't have a fund where you can transfer HSA $$$
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bean29
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Post by bean29 on Jan 13, 2017 14:59:58 GMT -5
I also fund my HSA fully and use it freely. I am overfunded.
I have $3,310 in my account and I am contributed another $648 in December that has not yet been deposited.
In a few months I will move $2,000-3,000 to an HSA account where I can invest in the stock market. I can not do that from my current account. I just want to have about $5500 before I do that. Then, every year I will add a portion of what I saved in excess of my deductible to the "retirement savings HSA". I just like to have enough built up in my account to cover my deductible in my account at the beginning of the year. My Medical Deductible is $2500, Prescription drugs are another $1,000 and my dental does not cover 100%, so I also use the fund for dental co-pays.
I really like that it is a "retirement savings vehicle" that has an "emergency fund" component built in without penalty as long as you are using it for medical bills.
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whoisjohngalt
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Post by whoisjohngalt on Jan 13, 2017 15:11:15 GMT -5
I also fund my HSA fully and use it freely. I am overfunded.
I have $3,310 in my account and I am contributed another $648 in December that has not yet been deposited.
In a few months I will move $2,000-3,000 to an HSA account where I can invest in the stock market. I can not do that from my current account. I just want to have about $5500 before I do that. Then, every year I will add a portion of what I saved in excess of my deductible to the "retirement savings HSA". I just like to have enough built up in my account to cover my deductible in my account at the beginning of the year. My Medical Deductible is $2500, Prescription drugs are another $1,000 and my dental does not cover 100%, so I also use the fund for dental co-pays.
I really like that it is a "retirement savings vehicle" that has an "emergency fund" component built in without penalty as long as you are using it for medical bills. Where do you invest it??
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justme
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Post by justme on Jan 13, 2017 15:44:33 GMT -5
I do a mix. Higher cost things or months where I've had to spend more on other things go on my hsa card. $10 copay and small things like that are paid out of pocket.
Probably not the smartest idea, but after doing the max individual in it last year I currently have $1500 or so in it with plans to max this year. In a few years I hope to be able to keep it all in there, but with a 1500 deductible and max oop higher than what I can put into my hsa each year I need to get a bit more stable spending wise.
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giramomma
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Post by giramomma on Jan 13, 2017 16:40:31 GMT -5
If I could afford our medical expenses on top of funding our HSA, I would totally do that. But I can't, so we spend money out of the HSA as quick as it goes in and are just grateful for the tax savings. We were like this last year. We could also only put 2K in it, and not fund it fully. I'm going to fully fund the HSA this year..I don't know if we'll get one again next year. The only reason we have an HSA is because of ACA. I'm hoping we can fully fund for 4 years, including this year. The year DS starts driving, I'm going to want to switch over back to the normal insurance plan. To me, the "reward" of of having 15K (or so) grow for 15-20 years isn't worth the risk of having a newly minted teen driver on the cheapest health insurance plan offered to us.
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quince
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Post by quince on Jan 13, 2017 17:12:45 GMT -5
We use it. We're maxing a 401k and two iras and we have at least 8k of oop costs a year. We're not quite cash heavy enough to sit on hsa money anymore.
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yogiii
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Post by yogiii on Jan 14, 2017 9:04:08 GMT -5
It's my 3rd year also and I'm saving it. Mine is in 100% 500index via the provider
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Deleted
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Post by Deleted on Jan 14, 2017 9:08:25 GMT -5
Decided to use it as medical needs arise, chose to do it that way so I wouldn't have to keep decades of receipts. Even doing that we have accumulated 30k in it as of today.
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sesfw
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Post by sesfw on Jan 14, 2017 11:53:35 GMT -5
I didn't hear about HSAs until I was about 61 and we looked for one that didn't have any service fees while contributing. We found one at State Farm. I turned 65, started Medicare and couldn't contribute any more funds.
At that time Allstate started charging $25 annual fee for 'non-contributing'. So I used the funds to pay co-payments for regular Dr visits for DH and I. When the account got less than $500 I called about closing the account and was able to do it without problem.
Beware of the service fees when you start Medicare.
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Anne_in_VA
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Post by Anne_in_VA on Jan 14, 2017 16:15:10 GMT -5
I wish I could have an HSA! I'm almost 70 and our benefits depot said I can't sign up for that ins because I'm on Medicare. Ugh!
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Knee Deep in Water Chloe
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Post by Knee Deep in Water Chloe on Jan 14, 2017 20:17:00 GMT -5
We use our HSA all the time as it came with a high deductible health insurance plan at work. Our annual deductible is $2,600, and my wife and I burn through that pretty fast (one prescription is almost $700/mo). I've been told the one advantage to accumulating $ in one is that you can use it for things like nursing home care and/or long-term care issuance when the time comes. Yeah that. Except our deductible is $3500.
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Sam_2.0
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Post by Sam_2.0 on Jan 17, 2017 17:11:20 GMT -5
Shoot, we've hit our $5,000 OOP for the last four years and will again this year. As fast as money goes in it comes right back out to pay the bills.
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naughtybear
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Post by naughtybear on Jan 17, 2017 17:47:25 GMT -5
With the ACA plans the ded has to be at least 6350 (I believe, will double check that) to be HSA eligible. I think with that it may be a little more difficult to do as want to make sure I have funds to be able to pay the whole ded should I need to.
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whoisjohngalt
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Post by whoisjohngalt on Jan 17, 2017 20:28:42 GMT -5
It's my 3rd year also and I'm saving it. Mine is in 100% 500index via the provider I so want to be you! I really need to figure out how to transfer the whole thing!
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justme
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Post by justme on Jan 17, 2017 20:45:46 GMT -5
With the ACA plans the ded has to be at least 6350 (I believe, will double check that) to be HSA eligible. I think with that it may be a little more difficult to do as want to make sure I have funds to be able to pay the whole ded should I need to. No the minimum is like 1000 or 1500.
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naughtybear
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Post by naughtybear on Jan 17, 2017 20:50:52 GMT -5
Not for the ACA plans.
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justme
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Post by justme on Jan 17, 2017 21:10:20 GMT -5
I believe it's that the insurers choose not to offer plans with lower deductibles on exchanges, not that they aren't allowed. I know two years ago I could find plans with lower deductibles, bite I wasn't looking on the exchange because I wouldn't qualify for subsides. Btw my work plan is technically aca because it follows all the rules.
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naughtybear
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Post by naughtybear on Jan 17, 2017 21:16:29 GMT -5
There are plenty of lower ded plans that I could choose from, none were HSA eligible. It's a thing, I created a thread about it last year. Never did figure out why except that maybe because ACA was governmental that they are trying to phase out HSA's for whatever reason. I am not going to look for thr thread. It annoys me whenever I think about it.
Quick google, ACA follow HHS not IRS guidelines/rules for HSA eligible.
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justme
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Post by justme on Jan 17, 2017 21:23:19 GMT -5
Again, maybe the exchanges don't have lower deductible plans but it's not because the aca requires deductibles that high. The min is 1300 for singles.
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naughtybear
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Post by naughtybear on Jan 17, 2017 21:31:12 GMT -5
Again, they do, they are not HSA eligible per the ACA/healthcare.gov site. I can filter out the HSA eligible plans. When I was looking last year I came across this grey area and did some research. Never did figure out why this was as I wanted to do exactly what this poster wants to do. I can still do it it will just take a little longer to accomplish or a few years of using very little medical care, as I have to pay for everything until the ded.
EDIT When I was married we had HSA for years as I like them and yes the corporate plans were HSA eligible with a low ded of 1300/2600. Hence why I researched why the ACA plans were different.
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justme
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Post by justme on Jan 17, 2017 21:36:15 GMT -5
The deductible would not be why they aren't hsa eligible then. There's more requirements then just the deductible.
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naughtybear
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Post by naughtybear on Jan 17, 2017 21:55:31 GMT -5
No it's the deductible as far as I can tell, and I spent a lot of time wondering about it and researching it. There may be factors that contribute, but the deductible figure is what is the main factor as far as a concrete factor.
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