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Old 03-04-2015, 04:37 AM
 
Location: SW Corner of CT
1,948 posts, read 1,535,578 times
Reputation: 2438

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I have an HSA Insurance Plan at with a $4,000 deductible, in which the employer puts in $2,000 every year, and I put in the other $2,000 thru payroll deduction. The monies in the account rollover, it is not a "use it, or lose it" deal. Currently at $8,000....and being my deductible is $4,000, instead of putting in my $2,000, I've been using that cash to pay down some debt and keep pace with living expenses before retirement (7 years to go)......after the debt is paid, and if my account is still over funded, I will use the extra cash for investments. What do you think of my plan ??
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Old 03-04-2015, 09:22 PM
 
Location: The Berk in Denver, CO USA
14,028 posts, read 20,336,588 times
Reputation: 22749
You are foolish for many reasons.
You need to research HSAs.
You need to understand Medicare and what it actually costs.
You should have a goal of having at least $20K in your HSA when you retire. More would be better.
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Old 03-04-2015, 10:48 PM
 
Location: Wisconsin
21,538 posts, read 43,992,643 times
Reputation: 15135
Quote:
Originally Posted by beer belly View Post
I have an HSA Insurance Plan at with a $4,000 deductible, in which the employer puts in $2,000 every year, and I put in the other $2,000 thru payroll deduction. The monies in the account rollover, it is not a "use it, or lose it" deal. Currently at $8,000....and being my deductible is $4,000, instead of putting in my $2,000, I've been using that cash to pay down some debt and keep pace with living expenses before retirement (7 years to go)......after the debt is paid, and if my account is still over funded, I will use the extra cash for investments. What do you think of my plan ??
You can't use this account for anything but medical expenses.

If you withdraw for other purposes, you will pay income tax on the withdrawal - PLUS, if you are under age 65 when you make the withdrawal, there is an 10% penalty on the withdrawal.

After retirement those funds can be used to pay/reimburse yourself for Medicare Parts B, D and Advantage premiums (but not Medigap premiums), in addition to your normal healthcare expenses.

Health Savings Accounts After Medicare-Kiplinger

HSAcenter - Health Savings Accounts - Health Care and Savings for You and Your Family

You are better served rolling this HSA over to an HSA trustee which allows investments in the stock market - and keep the money in the HSA. My son/dil are enrolled with this one:

Home - Health Savings

which allows investment in Vanguard funds. There are other similar trustees out there.

You will avoid taxes, can use these monies if you wish to reimburse yourself for Medicare expenses (see above). Eventually, you are going to need a stash for medical expenses. Don't dismantle the advantages of tax-free growth in an HSA.

Last edited by Ariadne22; 03-04-2015 at 11:01 PM..
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Old 03-05-2015, 06:22 AM
 
Location: SW Corner of CT
1,948 posts, read 1,535,578 times
Reputation: 2438
Quote:
Originally Posted by Ariadne22 View Post

After retirement those funds can be used to pay/reimburse yourself for Medicare Parts B, D and Advantage premiums (but not Medigap premiums), in addition to your normal healthcare expenses.

Health Savings Accounts After Medicare-Kiplinger

HSAcenter - Health Savings Accounts - Health Care and Savings for You and Your Family

You are better served rolling this HSA over to an HSA trustee which allows investments in the stock market - and keep the money in the HSA. My son/dil are enrolled with this one:

Home - Health Savings

which allows investment in Vanguard funds. There are other similar trustees out there.

You will avoid taxes, can use these monies if you wish to reimburse yourself for Medicare expenses (see above). Eventually, you are going to need a stash for medical expenses. Don't dismantle the advantages of tax-free growth in an HSA.
Forgot to mention that I was banking it to cover Medicare expenses after retirement. I will look into the HSA Trustee....Thanks
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Old 03-05-2015, 05:12 PM
 
Location: Connecticut
206 posts, read 344,868 times
Reputation: 306
Quote:
You can't use this account for anything but medical expenses.
Until you are 65. After that, you can use the funds for any reason and it will be taxed as ordinary income. Just like your 401(k)!!
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Old 03-06-2015, 05:14 PM
 
Location: SW Corner of CT
1,948 posts, read 1,535,578 times
Reputation: 2438
Quote:
Originally Posted by Yellow Saltbox View Post
Until you are 65. After that, you can use the funds for any reason and it will be taxed as ordinary income. Just like your 401(k)!!
Now, that is good to know...Thanks
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