Who Has the MOST Money in an HSA?

[ericrugiero]

I was checking my Fidelity balances today and I have a little over $16,000 in my HSA.  That feels pretty good because it's over two years of the max out of pocket for our medical plan at work.  But, I assume some of you crazy savers have WAY more money in your HSA than we do. 

Google says the HSA was rolled out in 2004 and we didn't switch to a high deductible plan that is HSA eligible at my company till about 2015.  Also, we use our HSA for medical expenses (two kids braces are the biggest cost so far but we also had one year where we hit the out of pocket max for medical).  Folks who have maxed out their HSA for longer and haven't used it for medical expenses could have a lot more saved.  I'm just curious what some of those balances look like. 

Quick public service announcement:  I didn't realize that in my plan HSA contributions default to cash so they are safe but don't make anything.  You have to manually set it up to be invested.  We keep ~$2000 in cash that can be spent and the rest invested in the same funds as my 401K. Future contributions are set up with 80% invested and 20% into cash.  If I had realized I needed to do that sooner I would have at least a couple thousand more. 

[meandmyfamily]

We have $5,200 and I am thrilled.  We are a family of 6 and have used it for 3 sets of braces plus ER visits so far.  We plan to invest anything over $10,000.  I can't wait to hit that number.  We will invest more when the kids are out of the house.  I bet there are some nice big balances on this forum.

[AerynLee]

$21k between our two HSA's plus another $2k in a PEHP (similar type account).

I was actually starting to wonder if there is such thing as too much money in an HSA. I'm guessing that as long as we are contributing through our jobs and get to contribute pre-FICA it will always make sense but am curious what other's think

We are DINKs and rarely have any medical bills (often going a full year without touching the deductible).

[PhrugalPhan]

I have had an HSA for 4 years and with investment returns I am near $20,000.  But I am an individual, so to find some of the high balances you will be seeing married accounts (where they can save double the amount I can).  I thought I read on bogleheads someone had an account over $120,000.  It will be interesting to see who can brag on this account.

[appleseed]

We have around $13,000 in our family HSA that we started last year, and I still have about $3,500 of this year's contributions still to add. We haven't used it for any medical expenses to date (used cash on hand). I have a few k in cash and invest most of it.

We've been very happy with Lively, if anyone is looking for an HSA. They use TD Ameritrade for the investing. So far it's been pretty smooth process.

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[DadJokes]

$14k - $13k invested & $1k not earning anything

I only recently started maxing it out and not reimbursing expenses. As of now, we have a little over $2k in unreimbursed expenses.

[ericrugiero]

I was actually starting to wonder if there is such thing as too much money in an HSA. I'm guessing that as long as we are contributing through our jobs and get to contribute pre-FICA it will always make sense but am curious what other's think

I don't think you are anywhere close to that.  At age 65 you can use it like a traditional IRA.  The only real disadvantage compared to a traditional IRA is the age you can access (for non medical expenses) is 5.5 years later and I don't believe there is any way to do a Roth conversion ladder.  So, you need enough other money to get you to age 65 and then you can use HSA money after that.  There is no RMD (required minimum distribution) like with an IRA so after 65 it's actually more flexible.  But, if you have money left after your death then your kids do have to pay income tax on all that money the year they get it rather being able to spread it out over multiple years like a traditional IRA. 

Remember, medical expenses tend to go WAY up as you age. 

[appleseed]

Does anyone have suggestions for how to save receipts for reimbursement later? I haven't been good about it and should go back through files through last year and keep them all together.

Are scanned copies of receipts ok for reimbursement?

I can surely google an answer, but if you've got a good system, please share it.

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[erutio]

I agree that it will be near impossible to overcontribute to an HSA.  It is easily the best retirement vehicle available, which is why maxing it is listed as the 3rd priority in the
Investment Order post, after getting your match and paying down high interest debts.

You get:
1. Immediate income tax savings on contributions.  401k-like.
2. Immediate FICA tax savings on contributions, if you are contributing through employer cafeteria plan.  Unique to HSA.
3. Tax-free growth.  No taxes on interest, dividends, or capital gains.  Roth-like.
4. Tax-free withdrawal for medical expenses, at any age.  Unique
5. Tax-free, penalty-free withdrawal for Medicare premiums.  Unique.
6. Penalty-free withdrawal after age 65. You still pay tax on it at your marginal rate, making this account functionally like a 401k or tIRA (except for age 59.5 vs 65).
7. No mimimum distributions requirements.  As you age through retirement, you are free to withdrawal or let compound as you please. 

I want to highlight benefit #5.  Once you are on medicare, you are allowed to pay your medicare premiums with your HSA, tax-free.  Meaning, at a time when people are drawing down from their retirement accounts to pay for expenses, what you draw from you HSA will not be added to your MAGI, keeping your overall tax bill lower. 

We have been on a HDHP since 2016, so for my family of 4, our HSA balance is about 24k.  Most of it is invested in a total stock market index, though there is some cash sitting idle.  I have my account set on a sweep when the cash reaches a threshold, so there is some inefficiency built in there.

In terms of withdrawal strategy, initially I was keeping all my receipts by scanning.  But we have been incredibly blessed with good health in my family, so my receipts were all dinky bills <$100 or co-pays <$30.  For these amounts, it seemed like a hassle to scan them all in, save them in a folder on my computer, and remember to back the files up.  So I just take the withdrawal for these small receipts as they come now. Should a larger bill come in the future, I will probably go back to scanning them. 

[erutio]

Are scanned copies of receipts ok for reimbursement?

Yes of course.  You have to scan it in to submit it for reimbursement anyways, so might as well have it scanned and saved somewhere already.

[appleseed]

Are scanned copies of receipts ok for reimbursement?

Yes of course.  You have to scan it in to submit it for reimbursement anyways, so might as well have it scanned and saved somewhere already.

Thanks!

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[TheAnonOne]

Sitting at 31k, it's just another investment account for us. I wouldn't pull from it for medical expenses, even if I had them.

[redhead84]

My spouse and I both have an HSA, but I'm the only one currently contributing as I carry the benefits in our family. Combined value is just over $37K. Most of this has been added in the last few years. We used to use the $$ for health care expenses, only contributed enough to cover the deductible, and left it in the bank accounts set up by our employers. I believe opening HSA accounts with access to investments was the precursor to our change in strategy for the HSA accounts. Thankfully, my employer will send the contributions to any account so I'm not locked into their terrible account option.

[diapasoun]

Individual account since 2016, currently sitting pretty at about $14k. My employer contributes half of the HSA money, which has been a big reason why I've stuck with it; that's an extra $1700 every year to my salary, and given my current medical expenses that's been worth it over the last four years.

If we decide to have a baby I'm switching to the regular PPO version of this plan, though...

[DadJokes]

Documenting and storing receipts is very important if you plan to get reimbursed in the future.

I've set up a Google Sheet that tracks the following:
Date of payment
Service
Provider
Amount
Payment method
Link to bill (if provided)
Link to receipt
Link to credit card statement
Whether reimbursed (I just use this column to track how much I have available to reimburse)

For the items that I link to, I have separate folders in Google Drive where digital copies of those items are stored.

Below is an image of one record:
https://imgur.com/a/2F3lstY

[tjrssibelle]

A few hundreds shy of 30k, single contributor. Majority is invested in the stock market minus the yearly deductible.

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[Paul der Krake]

About 45k. Not adding to it anymore since we are on a traditional plan now.

I’m starting to be concerned that we have too much in pre-tax accounts, so I will likely drain what I can from saved receipts soon.

[PhrugalPhan]

About 45k. Not adding to it anymore since we are on a traditional plan now.

I’m starting to be concerned that we have too much in pre-tax accounts, so I will likely drain what I can from saved receipts soon.

I guess I am missing the point.  How will draining the HSA help with your pre-tax account balances?

[MDM]

About 45k. Not adding to it anymore since we are on a traditional plan now.

I’m starting to be concerned that we have too much in pre-tax accounts, so I will likely drain what I can from saved receipts soon.

After money is in the HSA, if one has medical expenses the HSA acts like a Roth.

[Simpli-Fi]

$1k min on the card and $30k invested same as my aftertax brokerage account.  Wish I would have known about the reimbursements "hack" earlier in my career, started cash flowing all medical expenses this year.

I haven't done much ACA research, but are there any plans that have high deductibles with HSAs?

[Paul der Krake]

About 45k. Not adding to it anymore since we are on a traditional plan now.

I’m starting to be concerned that we have too much in pre-tax accounts, so I will likely drain what I can from saved receipts soon.

After money is in the HSA, if one has medical expenses the HSA acts like a Roth.

You know, I never looked at it that way, I’ve just been looking at my portfolio’s bucket sizes and missed the forest. Thank you for putting me straight.

[rockstache]

Family of 3 with $34k in ours. I don’t plan to touch it until retirement, and probably not until old age retirement honestly, but we’ll see.

[Jim Fiction]

Just shy of $21K currently split between three accounts - two in my name, one in my wife's. DW's is the active one linked to our insurance through her employer. I've been hemming and hawing over whether to liquidate the oldest account and add those funds to our house down payment fund or to roll it into one of the other HSA accounts. We are likely going to buy a home next spring/summer so we may tap into those funds.

DW never wanted to invest any of it while we were in the process of getting pregnant/having children, not wanting to risk losing the stash in the market and having to potentially face large medical bills. Though she recently gave birth to our second and likely final child, so it may be time to revisit that conversation.

We have paper receipts in several binders, organized by year. I also have some more recent digital receipts on my computer. Its not organized nearly as well as I want it to be which drives me nuts, but it feels like such a herculean task that I keep putting it off.

[rockstache]

We have paper receipts in several binders, organized by year. I also have some more recent digital receipts on my computer. Its not organized nearly as well as I want it to be which drives me nuts, but it feels like such a herculean task that I keep putting it off.

Ugh, this is something I need to do too. I have the physical receipts in folders by year, but I really just want to scan them and save them and throw out the originals - just haven't done it.

[Lucky Recardito]

Roughly $33k. Keep the minimum required as cash ($1k, I think?) and the rest is invested. Have spent from the HSA in high-medical-cost years (hello, baby-having), but otherwise cash-flow our (blessedly minimal) medical expenses and keep a spreadsheet & folder of receipts. I have about $3k in unclaimed medical spending tracked currently. I mainly think of our HSA as a retirement account, but I'm not dogmatic about it and will pull $$ from it when it makes sense to do so.

[G-dog]

Started HSA in 2014 (or 2013?). Retired in 2015 (at 55 yo).  Still have account via retirement medical option. Now at about $68K (all but about $1K invested).  Max contribution (married) every year.  I think I cannot contribute once I am pushed onto Medicare.

Anyone have advice on what receipts are sufficient. I am saving receipts when I can, but for prescriptions there are the paperwork on the medicine, and then the receipt that you paid (and item listed is just “prescription).  Is the paperwork from the pharmacy sufficient?

[soccerluvof4]

We have 34,387$ as of today.

[HPstache]

$8,900

[MDM]

Started HSA in 2014 (or 2013?). Retired in 2015 (at 55 yo).  Still have account via retirement medical option. Now at about $68K (all but about $1K invested).  Max contribution (married) every year.  I think I cannot contribute once I am pushed onto Medicare.

Anyone have advice on what receipts are sufficient. I am saving receipts when I can, but for prescriptions there are the paperwork on the medicine, and then the receipt that you paid (and item listed is just “prescription).  Is the paperwork from the pharmacy sufficient?

Won't know that for sure until someone gets audited and there is a tax court ruling on disputed documentation.

Pub. 969 says

Recordkeeping.
You  must  keep  records  suffi-cient to show that:
•The distributions were exclusively to pay or reimburse qualified medical expenses,
•The qualified medical expenses hadn’t been previ-ously paid or reimbursed from another source, and
•The medical expenses hadn’t been taken as an item-ized deduction in any year.

[AerynLee]

I was actually starting to wonder if there is such thing as too much money in an HSA. I'm guessing that as long as we are contributing through our jobs and get to contribute pre-FICA it will always make sense but am curious what other's think

I don't think you are anywhere close to that.  At age 65 you can use it like a traditional IRA.  The only real disadvantage compared to a traditional IRA is the age you can access (for non medical expenses) is 5.5 years later and I don't believe there is any way to do a Roth conversion ladder.  So, you need enough other money to get you to age 65 and then you can use HSA money after that.  There is no RMD (required minimum distribution) like with an IRA so after 65 it's actually more flexible.  But, if you have money left after your death then your kids do have to pay income tax on all that money the year they get it rather being able to spread it out over multiple years like a traditional IRA. 

Remember, medical expenses tend to go WAY up as you age.

I agree that it will be near impossible to overcontribute to an HSA.  It is easily the best retirement vehicle available, which is why maxing it is listed as the 3rd priority in the
Investment Order post, after getting your match and paying down high interest debts.

You get:
1. Immediate income tax savings on contributions.  401k-like.
2. Immediate FICA tax savings on contributions, if you are contributing through employer cafeteria plan.  Unique to HSA.
3. Tax-free growth.  No taxes on interest, dividends, or capital gains.  Roth-like.
4. Tax-free withdrawal for medical expenses, at any age.  Unique
5. Tax-free, penalty-free withdrawal for Medicare premiums.  Unique.
6. Penalty-free withdrawal after age 65. You still pay tax on it at your marginal rate, making this account functionally like a 401k or tIRA (except for age 59.5 vs 65).
7. No mimimum distributions requirements.  As you age through retirement, you are free to withdrawal or let compound as you please. 

I want to highlight benefit #5.  Once you are on medicare, you are allowed to pay your medicare premiums with your HSA, tax-free.  Meaning, at a time when people are drawing down from their retirement accounts to pay for expenses, what you draw from you HSA will not be added to your MAGI, keeping your overall tax bill lower.   

Thanks for your input. That was basically what I was thinking, it just seems weird at a surface level to have so much in an HSA when our average medical spending is probably less than $500/year

[MDM]

Thanks for your input. That was basically what I was thinking, it just seems weird at a surface level to have so much in an HSA when our average medical spending is probably less than $500/year

Yes, for now.

The standard Medicare Part B premium alone is $1,735 per person per year (or higher depending on your income).  See Medicare costs at a glance | Medicare.

[DadJokes]

Something I find funny:

When people criticize whole life (which certainly deserves every bit of criticism it gets), they say, "Don't mix insurance and investments." However, that's basically what's happening with an HSA, and it's one of the best investment vehicles out there.

[Lucky Recardito]

An HSA is not insurance.

[Paul der Krake]

Thanks for your input. That was basically what I was thinking, it just seems weird at a surface level to have so much in an HSA when our average medical spending is probably less than $500/year

Yes, for now.

The standard Medicare Part B premium alone is $1,735 per person per year (or higher depending on your income).  See Medicare costs at a glance | Medicare.

I suspect congress will make HSA funds available to pay for private coverage premiums, at some point. It’s already good for COBRA, Medicare, and LTC.

[DadJokes]

An HSA is not insurance.

It may not be, but it is intertwined with insurance, enough so that it debunks the cliche criticism. The better criticism of whole life is simply to point to the fees and returns in comparison with other investment vehicles.

[use2betrix]

We have about $25.5k in our HSA. I’ve maxed it out the last 3 years and hadn’t had an HSA prior.

I’m really on the fence about doing the HSA or PPO plan this coming year. Financially, I think the HSA does come out ahead, but I have a tendency to neglect my health much more for routine checkups and small issues, than if I had the expensive PPO plan..

[HPstache]

I don't use mine as an investment beyond money market type returns.  I use it for tax saving and spend the funds on qualifying expenses as they come in.  I know that this is not optimal.

[secondcor521]

I haven't done much ACA research, but are there any plans that have high deductibles with HSAs?

Well, it will depend on your local ACA marketplace, but in mine, yes, there are nine.  Seven are Bronze level plans and two are Silver level plans.  In fact, there's even a filter for HSA-qualified plans, so they check for you on whether the plan is eligible.

It does seem that the HSA-qualified plans are slightly more expensive than similar non-qualified plans.  When I did my research last month, I think I figured I'm paying $21 more a month.  Worth it to me, personally.

I won't win for highest balance, but I probably would win for youngest account.  I opened mine yesterday afternoon, since this is the first month I have an HSA-qualified plan.  Prior to this month I had kids on my ACA plan with me, and I thought we all had to be on the same plan.  In retrospect, I think that was an erroneous thought, but it also isn't easy in my state to do anything moderately unusual like have different plans for members of the same tax family, so I probably saved myself some grief.

[Paul der Krake]

An HSA is not insurance.

It may not be, but it is intertwined with insurance, enough so that it debunks the cliche criticism. The better criticism of whole life is simply to point to the fees and returns in comparison with other investment vehicles.

I disagree, the connection is extremely tenuous.

I also put liquid dinosaurs in my gas tank every time I fill up, despite having learned from Jurassic Park that dinosaurs and cars often mean gruesome death.

[Need2Save]

As to how to manage your HSA-qualified receipts/expenses, I like to scan paper copies of doctor bills and receipts at the end of the year when I'm preparing for my taxes. 

The very first thing I do is log in to my medical plan website and download a summary report with all the dates of services of expenses paid for that year for me and my family members. This saves a lot of time!

I then save that as an excel spreadsheet (or really add a tab for each year to a prior sheet) and use that as a guide to be sure I have 'backup' for any of the health care expenses we had.  I have one column for 'paid with HSA' and one column for 'did not pay with HSA' and total up for the whole year.  On the last column I mark off whether I have the backup or not.

If I have the opportunity to save soft copies of Explanation of Benefits (EOBs) from my insurance carriers site or from doctors office which e-bill, I do that along the way and just keep a list so I know I don't have to hunt those down at the end of the year.  Luckily we don't have than many bills so this isn't too much work. I don't save any EOBs if our cost-share was zero (paid fully by the plan).

For Rxs, I scan a few of them at a time by stapling them to an 8 x 11 sheet of paper (usually by person if there are multiple).  You don't need to scan the Rx instruction booklet from the manufacturer. Just proof of date of purchase, the medication name, patient name, amount.

I won't tally up our balance again until the end of the year but as of December, 2019 we had around $63k combined (couple).  The majority of this we have invested and we keep the minimum cash balances required by our plans/employers/administrators.

[hoosier]

I have $56K in mine.  Been maxing it out for years and haven't touched in the past 4 years for medical expenses.

[achvfi]

I have $56K in mine.

$56K in ours too. We have about $25K spent on qualified medical expenses that was not reimbursed over the years. Its a hassle but I save receipts in two different digital locations and on a local drive. I tell myself it will be worth it in time.

[DadJokes]

Also, it looks like the HSA contribution limits will be increasing to $3,600/$7,200 in 2021. Hooray for an extra $100 to invest!

Unfortunately, projections using inflation numbers suggest that 401(k) & IRA contribution limits will not change. Opposite of hooray there...

[Engineer93]

~28k, which I'm thinking is probably too high.  Most likely taking DW off my medical plan so will only be able to contribute half of what I have been.

[LetItGrow]

~28k, which I'm thinking is probably too high.  Most likely taking DW off my medical plan so will only be able to contribute half of what I have been.

Why do you think it is too high?

We have about 60k in ours. Pay out of pocket for everything. We do not have the funds invested in any but a bond index from Fido.

[CarolinaGirl]

We have $26k currently and have taken out around $5k over the past few years due to surgeries. 

[talltexan]

I have $56K in mine.  Been maxing it out for years and haven't touched in the past 4 years for medical expenses.

Late to the party, and this is the first post that exceeds my balance. For TY 2019, our HSA showed investment returns in excess of our health care expenses.

[Queen Frugal]

Single mom of single child with $33,500 in HSA. I use it for all the medical expenses I can. Luckily we've been healthy for the last few years.

I scan every itemized medical receipt when it's paid into a special folder.

[secondcor521]

You get:
...
7. No mimimum distributions requirements.  As you age through retirement, you are free to withdrawal or let compound as you please.

8.  No income required to make a contribution.  When you're FIREd, if you stop earning wages, you generally lose the ability to contribute to 401(k)s and IRAs.  However, you retain the ability to contribute to an HSA (as long as you meet the other requirements).  HSA contributions enable you to fine tune your AGI for other AGI-related tax benefits and enable you to do a Roth conversion the same size as your HSA contribution essentially completely tax free.

[iluvzbeach]

We have right at $40K in HSA balances between the two of us. We max out each year on a family HDHP plan and also make a $1K catch-up contribution to my DH’s since he is over 55. We keep a few thousand in a cash account for expenses and the rest is invested. Although I know the general thought is to just let it grow and not use it for medical expenses until a later date, we do routinely use it to reimburse ourselves for medical expenses.

We’ve loved having a HDHP and HSA. In fact, we also maxed out a LFSA this year to use for dental/vision as we both had some high cost dental work that was needed.