Author Topic: Should I not use my HSA for health expenses?  (Read 2720 times)


  • 5 O'Clock Shadow
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  • Location: Colorado
Should I not use my HSA for health expenses?
« on: August 18, 2015, 07:37:13 PM »
We've had a couple of "normal" years in a row where I have not had a max out of pocket hit on my HDHP.  So I'm actually accumulating in my HSA instead of withdrawing everything I put in for the year.  I have a little over $17K in there now and contribute to the limit every year.   I have $14K invested in some mediocre mutual funds from an expense ratio perspective (0.60-0.80%).

I got to thinking should I only be contributing and not withdrawing to pay for health care expenses?  Basically pay for health care expenses out of my income and not the HSA.  In reality the effect of this would be shifting contributions from my taxable account to my HSA instead.  I like the flexibility of the taxable account but the HSA grows tax free.

For those of you with HSA's pre-FIRE, how do you treat your HSA?  Do you actually use it or is it just another tax advantaged investment account to be used post-FIRE?


  • Senior Mustachian
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Re: Should I not use my HSA for health expenses?
« Reply #1 on: August 18, 2015, 08:19:38 PM »
This article seems a good description of the HSA advantages:

Didn't have HDHP/HSA pre-FIRE but do now.  If we had it then, we likely would have done exactly as we are now: paying out of pocket for whatever medical expenses we can, and going to the HSA only if needed.  That "triple tax advantage" is a good deal indeed.


  • Magnum Stache
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Re: Should I not use my HSA for health expenses?
« Reply #2 on: August 18, 2015, 08:23:29 PM »
I can't max out my 403b, my Roth IRAs, my HSA and still have money to pay my health bills.  So, I do use my HSA money as needed so I can get close to maxing out my Roth.  If I had more, than yes I'd save my HSA.  As long you save your receipts you can pull out money as needed so the flexibility is great.


  • 5 O'Clock Shadow
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Re: Should I not use my HSA for health expenses?
« Reply #3 on: August 18, 2015, 08:40:31 PM »
I have $10,000 that sits in an HSA from a few years ago. My current employer doesn't have an insurance offering that allows me to contribute to an HSA unfortunately, I miss being able to put that money away pre-tax! We just pay for medical expenses out of pocket right now. Under normal circumstances I would invest the HSA and just let it sit until retirement - and probably grow it if I get insurance that lets me do so again. However, we are anticipating some spending for fertility possibly that isn't covered by insurance. I'm glad that the HSA is there for us as an option if we choose to use it. We could also pay for those expenses out of taxable accounts however it may delay some of our other goals.

My advice would be to let it sit for retirement OR for possible major medical spending. Just cover basic/typical medical expenses out of pocket.