Author Topic: Several Questions about my HSA  (Read 919 times)

ThatGuy

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Several Questions about my HSA
« on: March 26, 2021, 04:46:19 PM »
I have a somewhat unique and fortunate situation.  I retired at the end of 2020.  I am 57 years old and single.  My former employer is the USPS which allows me to continue my medical insurance through them.  I have an HSA plan and the Post Office contributes $100 per month to my HSA account.  Am I permitted to make contributions to my HSA even though I'm no longer working?  Should I make contributions?  Do I need to deposit the contributions in the account that was setup for me by the Post Office or can I put the money into my HSA account I have with Fidelity?

EvenSteven

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Re: Several Questions about my HSA
« Reply #1 on: March 26, 2021, 06:06:00 PM »
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I have an HSA plan and the Post Office contributes $100 per month to my HSA account.  Am I permitted to make contributions to my HSA even though I'm no longer working?

They keep contributing even after you've retired? Sounds like a good deal!

Yes you can contribute to an HSA if you are covered by an HSA eligible health plan, regardless of your employment status. The contribution limit for a single person is $3,600 in 2021, and that includes what the USPS will contribute. So if they are contributing 1200 per year, you can put in an extra 2400.

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Should I make contributions?

Probably, but it might depend on your current taxes. Do you have enough taxable income to pay taxes? If yes then an HSA is a good deal. If you already have expenses low enough that you don't pay taxes, then it's not of much value.

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Do I need to deposit the contributions in the account that was setup for me by the Post Office or can I put the money into my HSA account I have with Fidelity?

You can contribute to your HSA with Fidelity. If the account that your employer uses has fees higher than Fidelity, then you could even periodically roll over the money in that account to your Fidelity account.

G-dog

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Re: Several Questions about my HSA
« Reply #2 on: March 26, 2021, 06:19:32 PM »
Limit to contribute depends on your age (and as noted above, USPS contributions have to be counted too).

Limit for individual for 2021 is $3600, if you ore 55 yo or older you can contribute another $1000.
If your partner is in your plan, you can contribute $7200, +$1000 if you are 55 yo or older. If your partner is also 55 yo or older, they can open their own HSA and contribute another $1000.

Unlike an IRA, you have to make these contributions by the end of the calendar year.

Even ignoring being able to reduce your taxable income (which I wouldn’t ignore because you might open up some Roth conversion space), you can invest most of your HSA and it grows tax-free.

Keep your medical receipts in order to support taking distributions from your HSA. You can save them and take the distribution in later years.

secondcor521

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Re: Several Questions about my HSA
« Reply #3 on: March 26, 2021, 06:37:26 PM »
Unlike an IRA, you have to make these contributions by the end of the calendar year.

The deadline for HSA contributions is 4/15 of the following year, just like IRAs.  (Technically it's probably the filing deadline not including extensions, so maybe it's 5/17/2021 for 2020 contributions.)


G-dog

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Re: Several Questions about my HSA
« Reply #4 on: March 26, 2021, 06:41:47 PM »
Unlike an IRA, you have to make these contributions by the end of the calendar year.

The deadline for HSA contributions is 4/15 of the following year, just like IRAs.  (Technically it's probably the filing deadline not including extensions, so maybe it's 5/17/2021 for 2020 contributions.)

Hmm.  Oh. That’s right.  I confused it with Roth conversion.  I knew there was something that had to be done within the calendar year.  I know I did my contribution before filing a couple of years. I try to get it done during the calendar year now, just for ease of tracking and record keeping for myself (though I can pick the tax year on my provider site)

Thanks for catching that!

 

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