Author Topic: HSA: use or save?  (Read 594 times)

LadyMaWhiskers

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HSA: use or save?
« on: September 03, 2017, 02:09:36 PM »
If I have money to pay for my medical expenses, is it better to hoard an HSA? I can't recall the tax treatment of these accounts, just that you can use them at retirement age without penalties.

sokoloff

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Re: HSA: use or save?
« Reply #1 on: September 03, 2017, 03:17:59 PM »
I save mine and pay all medical out of pocket.

Start a folder and an Excel/Google sheet with all the expenses that you incurred after the HSA started. That's money that you can take out tax-free from the account whenever you want. Let the account grow untaxed until you absolutely need the money and it becomes another effective retirement savings vehicle.

Rollin

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Re: HSA: use or save?
« Reply #2 on: September 04, 2017, 02:59:20 PM »
Isn't that simply treating it as an IRA? I know there are differences later on, but...I use mine for medical expenses so that I can reduce my taxes relative to actual medical costs. I guess if one has maxed out other tax vehicles the HSA would be another tool to use, but if not then I'd do that first.
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SuperSecretName

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Re: HSA: use or save?
« Reply #3 on: September 04, 2017, 03:08:21 PM »
If I have money to pay for my medical expenses, is it better to hoard an HSA?
the answer is a very simple yes.  If you can afford to pay out of pocket, do that and let the HSA continue to grow.

NeonPegasus

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Re: HSA: use or save?
« Reply #4 on: September 04, 2017, 03:11:42 PM »
Isn't that simply treating it as an IRA? I know there are differences later on, but...I use mine for medical expenses so that I can reduce my taxes relative to actual medical costs. I guess if one has maxed out other tax vehicles the HSA would be another tool to use, but if not then I'd do that first.

With a Roth IRA, the contributions are taxed. With an HSA, they are not. With a Roth, you can take out your contributions any time, tax free. With an HSA, you can take out your medical expenses at any time. In the meantime, however, they go in tax free, grow tax free and then come out tax free. With trad IRA, withdrawals are taxed.

I guess the question is whether you think you'll want that money before whatever the age is when you can withdraw it for anything and you think you won't have any medical bills that you'll be able to reimburse.


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BTH7117

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Re: HSA: use or save?
« Reply #5 on: September 05, 2017, 01:02:44 PM »
Mad Fientist did a post on HSAs a few years ago that I found very helpful.  I have usually $1,000 in medical costs that I pay out of pocket so I can invest the HSA.  I also have a spreadsheet where I keep track of out of pocket expenses and scan receipts.  A bit of a pain, but I think it will be worth it.

HSA - The Ultimate Retirement Account