Author Topic: How (and when) to start an HSA  (Read 1885 times)

NewJourney

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How (and when) to start an HSA
« on: October 27, 2015, 09:28:57 AM »
Any of you have an HSA? Which one do you recommend?

Do you agree that they're better than an IRA or a Roth IRA?

Mother Fussbudget

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Re: How (and when) to start an HSA
« Reply #1 on: October 28, 2015, 03:35:03 PM »
An HSA is a Health Savings Account that goes hand-in-hand with a High Deductable Health Plan (HDHP).  I started mine last year when my company began offering them.  My HSA administrator is HSAbank, and I'm happy with them.  I deposit the maximum each pay cycle into HSAbank, then transfer the funds out to a TD-Ameritrade account linked to the HSA, and invest that in the Vanguard Total Stock Index ETF  (VTI?).

They're not 'better' than an IRA or Roth IRA - they're three different types of accounts that can be used to punch up your retirement savings.   
The Mad Fientist has a good article on HSA's here

Grigory

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Re: How (and when) to start an HSA
« Reply #2 on: October 28, 2015, 10:38:54 PM »
Do you agree that they're better than an IRA or a Roth IRA?
Lower contribution limit, higher withdrawal age... In what world and under what conceivable conditions would it be better than either kind of IRA?

Daddyfatsax

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Re: How (and when) to start an HSA
« Reply #3 on: October 29, 2015, 02:10:38 AM »
If you can get one through your employer the deposits to your HSA do not get FICA taxed (this is the only account I know of, EVER, to do this). Then either pay medical expenses tax free or withdraw in retirement and pay income taxes.

Conditions where it is better than IRA:
1. Pay medical expenses tax free at ANY age (as opposed to with money income and FICA taxed).
2. Withdraw after 65 with income tax only (still no FICA = savings over IRA).

Tjat

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Re: How (and when) to start an HSA
« Reply #4 on: October 29, 2015, 04:50:59 PM »
Do you agree that they're better than an IRA or a Roth IRA?
Lower contribution limit, higher withdrawal age... In what world and under what conceivable conditions would it be better than either kind of IRA?

Aside from FICA mentioned above, it is the only account that is pre-tax contribution and also sheltered for earnings taxes, and withdrawals for med expenses or after 65 aren't taxed. Even if you don't ever use medical services in your entire life, it works out better than IRAs...

BarkyardBQ

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Re: How (and when) to start an HSA
« Reply #5 on: October 29, 2015, 04:59:15 PM »
Do you agree that they're better than an IRA or a Roth IRA?
Lower contribution limit, higher withdrawal age... In what world and under what conceivable conditions would it be better than either kind of IRA?

http://www.madfientist.com/ultimate-retirement-account/

MoonShadow

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Re: How (and when) to start an HSA
« Reply #6 on: October 29, 2015, 05:12:58 PM »
Yes, an HSA is better than either a Traditional or Roth IRA, when the funds inside the HSA are considered and treated like retirement savings.  This requires that medical expenses are paid for out of cash flow.  However, if funds from the HSA are required to cover a fiscal crisis in the future, funds can be withdrawn without penalty so long as there is proof of a medical expense that was already paid out of pocket in a prior year, so long as the HSA already existed.