Author Topic: Nervous about using HSA as investment  (Read 2451 times)

themagicman

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Nervous about using HSA as investment
« on: May 17, 2015, 05:43:42 PM »
All, I have been reading a lot about using HSA as a super charged investment vehicle from madfientist. I like the idea of it my only worry is them changing to laws around using that money as a traditional IRA at a certain age. I am also worried about not taking it out of the account when I incur and expense and saving my withdraws for later on. I am worried that they might change the laws and not allow the ability to use them for past expenses. Is anyone else worried about this? I know they could change the rules on any investment account, so should I try not to worry and max this out?

MDM

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Re: Nervous about using HSA as investment
« Reply #1 on: May 17, 2015, 05:57:59 PM »
I know they could change the rules on any investment account, so should I try not to worry and max this out?
Yes, if you can afford to pay the max out of pocket without undue difficulty then that appears appropriate for you.

bacchi

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Re: Nervous about using HSA as investment
« Reply #2 on: May 17, 2015, 07:42:02 PM »
Even if they change the laws, so what? You will need that money for medical expenses at some point. Breaking a leg will cost $3500 or you can use it for dental cleanings.

themagicman

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Re: Nervous about using HSA as investment
« Reply #3 on: May 17, 2015, 07:46:13 PM »
Even if they change the laws, so what? You will need that money for medical expenses at some point. Breaking a leg will cost $3500 or you can use it for dental cleanings.

Yeah but maxing it out will give me much more than a million dollars in the account. Just worried the money could be better in taxable

ender

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Re: Nervous about using HSA as investment
« Reply #4 on: May 17, 2015, 07:51:54 PM »
I share your concerns about the future benefit of HSAs - so I just pay medical expenses out of it as they come. It's far easier than trying to keep receipts and document years upon years of misc medical expenses, most of which will be small.

Right now we have almost $10k in it but will continue to max it in spite of this.

If you plan on having kids, you will almost assuredly have qualified expenses to use it for that could prevent it from ever reaching a million.

bacchi

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Re: Nervous about using HSA as investment
« Reply #5 on: May 17, 2015, 07:54:21 PM »
Even if they change the laws, so what? You will need that money for medical expenses at some point. Breaking a leg will cost $3500 or you can use it for dental cleanings.

Yeah but maxing it out will give me much more than a million dollars in the account. Just worried the money could be better in taxable

It will? How do you figure? Using this calculator, I don't see $1m even if you save the maximum for 40 years. (The contribution maximum will increase but it's tied to inflation. In other words, $1m is worth $310k in 40 years at 3% inflation.)

http://www.hsabank.com/hsabank/education/hsa-savings-calculator

You could always max it out now and then stop after, say, 10 years.


themagicman

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Re: Nervous about using HSA as investment
« Reply #6 on: May 17, 2015, 08:01:58 PM »
Even if they change the laws, so what? You will need that money for medical expenses at some point. Breaking a leg will cost $3500 or you can use it for dental cleanings.

Yeah but maxing it out will give me much more than a million dollars in the account. Just worried the money could be better in taxable

It will? How do you figure? Using this calculator, I don't see $1m even if you save the maximum for 40 years. (The contribution maximum will increase but it's tied to inflation. In other words, $1m is worth $310k in 40 years at 3% inflation.)

It was more of a guess. But at the current max ($6,650) for  41 years (Until 65) and assuming 6% (Which you could argue was optimistic) gain after inflation it would be $1.1million

Regardless, it is going to be more than I hope to spend on medical costs.


You could always max it out now and then stop after, say, 10 years.


i like that idea! I could try that and see how my balance and laws are shaping up then and decide to continue or not