Author Topic: Health Savings Account - Deferred tax  (Read 1672 times)

LC

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Health Savings Account - Deferred tax
« on: March 23, 2019, 05:09:45 PM »
Hi folks, just wanted to start a topic on the use of HSA accounts as essentially an IRA account with bonus optionality.

Here's a decent overview of the use case:
https://www.madfientist.com/ultimate-retirement-account/

Benefits:
-Pre-tax contributions reduce taxable income and are not subject to FICA taxes (SSA, Medicare)
-Tax-free withdrawals for any qualified medical expenses incurred after the date you open the HSA acct
-Account is essentially treated as a traditional IRA after 65 years of age
-Many times employers are matching or providing these contributions

Cons:
-Fees are murky
-HSAs accompany high-deductible insurance plans
-The hassle of saving copies of all your medical expenses

Not a bad way to manage a few thousand annually.
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stahleyp

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Re: Health Savings Account - Deferred tax
« Reply #1 on: March 23, 2019, 06:58:37 PM »
These aren't available for everyone (IRAs are available for most folks as long as you have income - whether it's deductible or not, is a different story). You have to be part of a high deductible plan.
Paul

TwoCitiesCapital

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Re: Health Savings Account - Deferred tax
« Reply #2 on: March 25, 2019, 05:40:36 PM »
Hi folks, just wanted to start a topic on the use of HSA accounts as essentially an IRA account with bonus optionality.

Here's a decent overview of the use case:
https://www.madfientist.com/ultimate-retirement-account/

Benefits:
-Pre-tax contributions reduce taxable income and are not subject to FICA taxes (SSA, Medicare)
-Tax-free withdrawals for any qualified medical expenses incurred after the date you open the HSA acct
-Account is essentially treated as a traditional IRA after 65 years of age
-Many times employers are matching or providing these contributions

Cons:
-Fees are murky
-HSAs accompany high-deductible insurance plans
-The hassle of saving copies of all your medical expenses

Not a bad way to manage a few thousand annually.

Agreed! Best way to save money with triple tax free benefits and you can choose to not spend it on healthcare  where the benefits are basically the same as a typical IRA.

Agreed with above poster that it's only for those where a high-deductible health insurance plan makes sense. Maybe not worthwhile otherwise, but as a healthy young male who would be doing a high-deductible plan anyways, I take advantage and max out the HSA every year and pay health expenses out of pocket.

Investment options do tend to be limited at most providers, but there are a number of websites out there that exist to help you determine the pros & cons of each provider.

Gamecock-YT

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Re: Health Savings Account - Deferred tax
« Reply #3 on: March 25, 2019, 06:21:22 PM »
Hi folks, just wanted to start a topic on the use of HSA accounts as essentially an IRA account with bonus optionality.

Here's a decent overview of the use case:
https://www.madfientist.com/ultimate-retirement-account/

Benefits:
-Pre-tax contributions reduce taxable income and are not subject to FICA taxes (SSA, Medicare)
-Tax-free withdrawals for any qualified medical expenses incurred after the date you open the HSA acct
-Account is essentially treated as a traditional IRA after 65 years of age
-Many times employers are matching or providing these contributions

Cons:
-Fees are murky
-HSAs accompany high-deductible insurance plans
-The hassle of saving copies of all your medical expenses

Not a bad way to manage a few thousand annually.

Agreed! Best way to save money with triple tax free benefits and you can choose to not spend it on healthcare  where the benefits are basically the same as a typical IRA.

Agreed with above poster that it's only for those where a high-deductible health insurance plan makes sense. Maybe not worthwhile otherwise, but as a healthy young male who would be doing a high-deductible plan anyways, I take advantage and max out the HSA every year and pay health expenses out of pocket.

Investment options do tend to be limited at most providers, but there are a number of websites out there that exist to help you determine the pros & cons of each provider.

Fidelity coming in is a game changer.

rkbabang

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Re: Health Savings Account - Deferred tax
« Reply #4 on: March 26, 2019, 06:33:40 AM »
Hi folks, just wanted to start a topic on the use of HSA accounts as essentially an IRA account with bonus optionality.

Here's a decent overview of the use case:
https://www.madfientist.com/ultimate-retirement-account/

Benefits:
-Pre-tax contributions reduce taxable income and are not subject to FICA taxes (SSA, Medicare)
-Tax-free withdrawals for any qualified medical expenses incurred after the date you open the HSA acct
-Account is essentially treated as a traditional IRA after 65 years of age
-Many times employers are matching or providing these contributions

Cons:
-Fees are murky
-HSAs accompany high-deductible insurance plans
-The hassle of saving copies of all your medical expenses

Not a bad way to manage a few thousand annually.

Agreed! Best way to save money with triple tax free benefits and you can choose to not spend it on healthcare  where the benefits are basically the same as a typical IRA.

Agreed with above poster that it's only for those where a high-deductible health insurance plan makes sense. Maybe not worthwhile otherwise, but as a healthy young male who would be doing a high-deductible plan anyways, I take advantage and max out the HSA every year and pay health expenses out of pocket.

Investment options do tend to be limited at most providers, but there are a number of websites out there that exist to help you determine the pros & cons of each provider.

Fidelity coming in is a game changer.

What do you mean by Fidelity "coming in"?   I've had a Fidelity HSA for about 9-10 years now.  And the investment options are not limited in it at all.
« Last Edit: March 26, 2019, 09:09:39 AM by rkbabang »

701 LV

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Re: Health Savings Account - Deferred tax
« Reply #5 on: March 26, 2019, 09:07:47 AM »
Best HSA I've found is Lively. Zero fees. Uses TD Ameritrade for investments, and you can invest every dollar - no cash holding minimum.

Gamecock-YT

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Re: Health Savings Account - Deferred tax
« Reply #6 on: March 26, 2019, 11:32:10 AM »
Hi folks, just wanted to start a topic on the use of HSA accounts as essentially an IRA account with bonus optionality.

Here's a decent overview of the use case:
https://www.madfientist.com/ultimate-retirement-account/

Benefits:
-Pre-tax contributions reduce taxable income and are not subject to FICA taxes (SSA, Medicare)
-Tax-free withdrawals for any qualified medical expenses incurred after the date you open the HSA acct
-Account is essentially treated as a traditional IRA after 65 years of age
-Many times employers are matching or providing these contributions

Cons:
-Fees are murky
-HSAs accompany high-deductible insurance plans
-The hassle of saving copies of all your medical expenses

Not a bad way to manage a few thousand annually.

Agreed! Best way to save money with triple tax free benefits and you can choose to not spend it on healthcare  where the benefits are basically the same as a typical IRA.

Agreed with above poster that it's only for those where a high-deductible health insurance plan makes sense. Maybe not worthwhile otherwise, but as a healthy young male who would be doing a high-deductible plan anyways, I take advantage and max out the HSA every year and pay health expenses out of pocket.

Investment options do tend to be limited at most providers, but there are a number of websites out there that exist to help you determine the pros & cons of each provider.

Fidelity coming in is a game changer.

What do you mean by Fidelity "coming in"?   I've had a Fidelity HSA for about 9-10 years now.  And the investment options are not limited in it at all.

Having individual HSAs vs having what I'm guessing is an employer plan that you've had.

rkbabang

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Re: Health Savings Account - Deferred tax
« Reply #7 on: March 26, 2019, 05:15:36 PM »
Hi folks, just wanted to start a topic on the use of HSA accounts as essentially an IRA account with bonus optionality.

Here's a decent overview of the use case:
https://www.madfientist.com/ultimate-retirement-account/

Benefits:
-Pre-tax contributions reduce taxable income and are not subject to FICA taxes (SSA, Medicare)
-Tax-free withdrawals for any qualified medical expenses incurred after the date you open the HSA acct
-Account is essentially treated as a traditional IRA after 65 years of age
-Many times employers are matching or providing these contributions

Cons:
-Fees are murky
-HSAs accompany high-deductible insurance plans
-The hassle of saving copies of all your medical expenses

Not a bad way to manage a few thousand annually.

Agreed! Best way to save money with triple tax free benefits and you can choose to not spend it on healthcare  where the benefits are basically the same as a typical IRA.

Agreed with above poster that it's only for those where a high-deductible health insurance plan makes sense. Maybe not worthwhile otherwise, but as a healthy young male who would be doing a high-deductible plan anyways, I take advantage and max out the HSA every year and pay health expenses out of pocket.

Investment options do tend to be limited at most providers, but there are a number of websites out there that exist to help you determine the pros & cons of each provider.

Fidelity coming in is a game changer.

What do you mean by Fidelity "coming in"?   I've had a Fidelity HSA for about 9-10 years now.  And the investment options are not limited in it at all.

Having individual HSAs vs having what I'm guessing is an employer plan that you've had.

Thanks. I didn't know individual HSA's existed until this post.  I thought this whole discussion was about the type of employer sponsored plan which I have.