Year End Financial Planning

[BTDretire]

 Retired, MFJ, no work income, no SS income, no pension income. 64yrs old.
I have about $10k of saved up medical expenses over the last 4 years, after I stopped using the HSA funds ($50k).
 When is the best time to use them?
Do I use them all in one year.
I'm in the mode where I want to do as much in Roth Conversions as possible in the 12% bracket.
 At this point I have about $11k of taxable income from VTSAX. I don't know if any of that is Qualified Dividends. and maybe $2k of business asset disposal income. (Closed the business in '18', just liquidating minor leftover items.)
  So, what's the best time to liquidate HSA funds for saved up Medical expenses.
                                               Thanks

[Gin1984]

It depends on your other sources of income.

[ScreamingHeadGuy]

As I understand it: using HSA funds for medical expenses does not generate taxable income.

[terran]

Distributions from an HSA for qualified medical expenses won't be taxed, so I would take them out if you need spending money and I would leave them if you don't. I'd rather have money in Roth than and HSA because growth in a Roth is tax free no matter what and is better to inherit and growth in an HSA is only tax free if used for medical expenses and immediately taxable if inherited. For that reason you should withdraw and spend qualified medical expenses from an HSA before you withdraw from an IRA (as that could be converted to Roth instead of spending it) and before withdrawing from a Roth IRA. I would spend money from a taxable brokerage account before withdrawing from and HSA, though, unless realizing the capital gains was going to cause problems.

[BTDretire]

It depends on your other sources of income.

  My only sources of income are from my savings, non IRA savings, IRA savings, Roth IRA savings, the HSA and interest on a loan.
 So I have choices on where I derive my income.
  I was just trying to see if there is an optimal strategy for withdrawing HSA funds after retirement, using saved up medical expenses.

[Gin1984]

So you want to use up your tax free space, either $12,000 for single or $24,000 for married with IRA savings. Then you'll have to start on the rest. Does your state tax capital gains?  How much do you want to spend? Do you have enough in the HSA to continue growing if you pull your current medical spending? How much total is in all the account? Do you need to stay under a certain amount for ACA? Do you want to roll some out of your traditional into Roth?

[leomatthewadams]

It sounds like you’ve got a lot that you can choose from! I don’t have quite as many choices as you for my income, but I’m in a similar situation and wanted to come to the experts here to see what they had to say. I have heard many of the same things shared here in my research of how to use my HSA as well, and I’m going to bookmark this post to see if anyone else has more suggestions.

[BTDretire]

So you want to use up your tax free space, either $12,000 for single or $24,000 for married with IRA savings.

MFJ, $24,000

Then you'll have to start on the rest. Does your state tax capital gains?

No State Taxes.

  How much do you want to spend?

I only want to pay taxes up to the upper limit of the 12%  bracket,
$78,950.

Do you have enough in the HSA to continue growing if you pull your current medical spending? How much total is in all the account?

$50k in the HSA. Max I can pull out tax free (receipts to cover) is about $10k

Do you need to stay under a certain amount for ACA?

No ACA insurance.

Do you want to roll some out of your traditional into Roth?

 I just realized I'll need a little more money than I originally thought.
 I may need to just concentrate more on keeping my tax bill low,
rather than maxing my Roth conversions. (I'm a bit confused now)
 I have two kids in college and to cover housing, tuition and my living expenses
I'll need to have about $83k liquidated from my HSA, IRA and Roth accounts, I also have regular saving with cap gains.
 I need to reorganize with these latest thoughts.
EDIT:
 After this, I started a new thread.