4 HSA Hacks That Will Supercharge Your Wealth

[@Theretirementnerds]

*Bonus Hack #5!* - To help document the receipts over the course of your life, take a picture, and email it to yourself with the Subject line: Healthcare Expense + The Year it occurred. You can also set up a specific email account for these receipts. Something like "FamilyNameHSA@Gmail..." 🙂

[@CaedenV]

Just be careful of the purge! Google started purging old photos and emails from user accounts last year. It would be awful to think you have everything saved like that, only to find 20-30 years later that it is just gone because you were over a data cap and missed the notification a decade ago! Of course, storing receipts with your HSA provider can be a crab trap when you change providers or employers too, so that isn't necessarily a good idea either. But If you roll an old HSA over to a private acct that you are sure isn't going to go anywhere, then that could stand a better chance at lasting a good long while. At the end of the day though... paper copies are a pain, but not a terrible thing. I have also gotten in the habit of requesting yearly expense reports from our health care providers, that way we have a single print-out for the year of itemized expenses to work with. Takes a lot less space than storing each bill every time you use a service. We have a family of ADHD, so having all of our counseling and med mgmt visits as separate receipts builds up a lot of paper rather quickly! Getting it as a single summary for each of us every year really makes it easier to store, and easier to look at.

[@heidikamrath1951]

Nice!

[@kristiG5259]

Great tip! In the process of doing that now for 2023 and whatever we've incurred already for 2024!

[@bk-xn5tk]

Does irs really ask for reciepts? Could be like 50yrs old! Sounds unreasonable

[@heidikamrath1951]

@@bk-xn5tk not sure; might be on the honor system with a potential to be audited, but it makes sense that they would ask for receipts because if you simply take the money out, you DO pay taxes on it all those years later (age 65) because it essentially turns into a tax-deferred IRA. I’m going to keep the receipts, along with lists of qualified expenses (in case those ever change and something formerly allowed no longer is allowed) because I would really be bummed if I did have expenses which I paid out of pocket at the time they occurred and now had to pay taxes on my withdrawal just because I was too lazy or too disorganized to keep receipts. Remember: the government wants their taxes. This understanding alone makes me think yes, they aren’t going to let us slide without receipts.

[@Paul-GrnHil]

Great content. I had an HSA account as soon as it was offered by my employer for the last 14 years of my career. I maxed the contributions and only took out one reimbursement for an emergency surgery. I kept $3000 in cash to avoid annual account fees and invested the rest. Since I retired 2 years ago, I have been reimbursing my historical pre retirement medical expenses, as well as current expenses and the account balance is large enough that it still earns more than my withdrawals. It almost feels like my wife and I have free retirement medical because all of our current medical bills are being paid from this account and not from my taxable IRA withdrawals.

[@Theretirementnerds]

Sounds like you did all of the 4 hacks 🙂 Well done!!

[@butopiatoo]

What was the max value your HSA hit before you started spending it down? Of that peak balance, how much of it was earnings, at the peak?

[@amyx231]

I don’t think I can save 30 years worth of receipts 😅. I use it for thé larger bills. Thankfully I’m healthy

[@MissTReviews]

@paul-GrnHil, I'm wondering what company you used. Since most companies these days charge an account fee no matter what ($300 annually). OOPS, nvmd, I just remembered mine is a Self-Directed account. Invest in almost any asset, not just stock funds.

[@Paul-GrnHil]

My company used HSA Bank. Now that I'm retired, I moved my HSA to Fidelity. It has no fees. I keep 1 year of expected expenses in cash and the rest is invested in a Large Cap Growth fund.@@MissTReviews

[@toystoryyeselliotmooseno7014]

I have invested my contributions in my HSA account and have never spent out of it. I currently have 100k balance and will soon switch to dividend stocks to generate enough to cover all medical expenses without touching my principal amount.

[@Theretirementnerds]

That is so awesome! Great job!

[@Driving4bangers]

Literal goals.

[@toystoryyeselliotmooseno7014]

I made the transition to dividend stocks... VZ, O, PFE, and MO for around a 7 percent payout mean.

[@jeffreyosiwalajr3458]

at 100k you can probably withdraw your deductible amount each year and still make the money back in investment growth. No real reason so switch to dividends.

[@lambo650ER]

Boom 🤯

[@UnconventionalThinker]

Great video! One thing I've done is pay all medical bills on credit to snag 2% cash back, just to increase that dollar all the more

[@Theretirementnerds]

Look at that 🙂 another hack! Thank you for sharing!

[@Jay230612]

I pay through my spouse's FSA

[@kristiG5259]

Us, too!

[@LarsonFamilyFarm-LLC]

Best HSA commentary I've ever heard..nailed it.

[@Theretirementnerds]

Thank you so much!!

[@mdsloads]

Yes. Was also told hsa are not investable. I finally woke up and smelled the coffee and moved it into a fidelity account and did it myself.

[@Theretirementnerds]

Sorry you were told that! Need to send this video to that person :)

[@BlackDub21]

They were probably thinking of the fsa

[@rickarmstrong3944]

Another possibility many people don't know about is that you get a once in a lifetime ability to fund your HSA from your IRA without paying taxes on the IRA withdrawal as long as you move the money directly from the IRA to the HSA. Again this is only once in a lifetime.

[@Theretirementnerds]

Great point, Rick! Thank you for adding that!

[@kelmike060404]

Is this per social security number? If my husband does from his IRA can I also?

[@tinalippincott9823]

Wow, I did not know that! Wish I had! Thanks, Rick, for sharing. Obviously, maximum permissable contributions would still apply and this would be pre applying for Medicare @ 65 or when leaving employer high deductible health insurance at a later date. Correct me if I am wrong on this.

[@suzycreamcheese8888]

@@tinalippincott9823 you must still be covered on the high deductible health insurance plan to do this and you must also not be covered by any form of Medicare. I am a spouse insured on my husband's high deductible health insurance plan and made the once in a lifetime max contribution from my IRA to my HSA last year. Also make sure you have met or will meet the 12 months of coverage on the high deductible plan. Your HSA plan administrator can guide you.

[@kristiG5259]

I just did this last month!

[@iShootWild]

This guy is so good! Never heard somebody explained HSA or any health/financial related topic so well! Thank you for sharing this knowledge!!!

[@Theretirementnerds]

You are too kind :) Thank you so much for watching, and I'm so glad it was helpful!

[@a866903]

He did such a good job compared to a Dave Ramsey vid I just saw 😂😂

[@ziggy29]

Tax advantage #4: if you contribute to an HSA through a qualified cafeteria style payroll deduction, that money is not only shielded from state and federal income taxes, but also from payroll taxes like Social Security and Medicare. In that situation it is a quadruple tax advantage.

[@Theretirementnerds]

So Many Tax Advantages!! :) Thank you for sharing this!

[@darkimp1254]

I went to the comments looking a comment like this. When I do my annual income tax filing I submit how much is in my hsa, is that money taxed then or is it just for documentation?

[@ayeshasyed8890]

I did not understand the cafeteria style payroll bit, can you pls explain. Thanks for your time and comment!

[@risa-ru]

Do you have an example of this qualified cafeteria style payroll deduction?

[@ziggy29]

A "cafeteria" benefits plan is one where employees choose their deductions and contributions, usually upon hire or annual open enrollment periods. The "cafeteria" moniker is due to the way the participant "chooses" which plans and contributions to take off of a "menu" of options your employer provides. If you have such an HSA through a workplace plan and you can elect to contribute to the HSA through payroll deductions, you **probably** have a qualified payroll deduction, but you may need to check the details with the plan administrator. And even in such a qualified plan, the contributions have to come from payroll deductions to avoid SS and Medicare taxes on the contribution amounts. Many plans allow account holders to add additional funds on their own, but funds contributed that way will *not* avoid payroll taxes.

[@RichardKennedy-y6o]

ADDED BONUS - You can also withdraw from your HSA without the penalty after age 65 for NON-MEDIAL EXPENSES, but you would be taxed at your regular rate.

[@MossWaffle]

Now we need a backdoor Roth conversion for HSAs.

[@karmenwashington605]

But didn't he say not to use it? I'm lost

[@ebells33]

I didn't know about being taxed on it then, thx for this info!

[@Geronimo2Fly]

He mentioned that in the video, but good to point it out for anyone who missed it.

[@Geronimo2Fly]

WHAT??!!?? You can reimburse yourself? I had no idea! I wish I'd seen this video 20 years ago! I just sent to my kids so at least they can take advantage of this excellent information. Thank you!

[@Theretirementnerds]

Super cool, right! As long as you didn't already use the HSA to pay for the past reimbursments

[@e22ddie46]

I think these types of videos convinced me to switch from a PPO to a HDHP for next year.

[@lilblackduc7312]

This tutorial is a nugget of Wisdom! Thank you...

[@Theretirementnerds]

Thank you so much for watching! :)

[@JeromeDemers]

Moved to the US and didn’t properly understand HSA. Now I need to come back here at 64y old! 😆

[@mpbMKE]

Finally got an HSA this year and was shocked (in a good way) to find out it's effectively a pre-tax investment account in a savings account's clothing. I have mine through Fidelity and it's paying close to 5% just having it parked, but once the balance accumulates a bit I'll definitely be investing.

[@Theretirementnerds]

HSAs are amazing! Was it like finding a $20 in your pocket you forgot was there?

[@granitemoss1451]

If you qualify, you can open a self-directed HSA with a brokerage firm. You're not out of luck if your employer does not offer one.

[@Theretirementnerds]

Correct!

[@hhon8938]

I loooove the HSA account! We also do a limited FSA account on top of the HSA so we can pay for dental and vision. Our kiddos braces were from the limited FSA, the max being $3050 in 2023 which covered most of the braces! Best of both worlds and never have to touch the HSA investment account to get that maximized compound interest baby!

[@Theretirementnerds]

What a great combination! Thank you for sharing!

[@hhon8938]

@@Theretirementnerds thanks so much for your channel!! While we’re a bit away from retirement being millennials, you give such great sound content that is super useful for when Medicare considerations have to start! And your guest(s) are so knowledgeable as well!!! Newer to your channel but just fabulous and for some reason fits so much into our FI/FIRE mindset!

[@J-2024-v8i]

Another detail that many don’t know is that, for a married couple with both covered by an HSA eligible medical plan as a family (both are covered by the plan from one of the spouses), even if they cannot go over the family maximum contribution limit, if they are both 55yo or over, they can both do the $1000 catch-up contribution, Just note that the catch-up contribution is specific to each spouse, not joined, and therefore needs to be done to each spouses separate HSA account, as there are no HSA joint accounts.

[@Theretirementnerds]

Very well said. That is a tricky topic to navigate and you articulated that very well. Thank you for watching and adding this.

[@annethomas5662]

@JI-620 so I am trying to learn as much as I am 62 right now. My neighbor sent me this video as he is also trying to learn. So I have an HSA account. We are self employed and have insurance from the marketplace. You say an HSA is not a joint account? I am confused our insurance is both of our names. I have always used our HSA account for both of us? Am I wrong and is he supposed to have a separate HSA?

[@joed5918]

​@@annethomas5662 I had the same concern. I am not an HSA expert but from what I understand your HSA account can be used for your spouse and immediate family members. I don't think anyone other then the account owner can contribute to the HSA.

[@J-2024-v8i]

@@annethomas5662 If you and your spouse are both covered by an HSA-eligible plan, if you don’t count the catch-up contributions, your family HSA contribution limit for 2023 was $7,750. You can allocate this amount to one HSA in your name, or split it between your HSA account and your spouses separate HSA account, in whatever proportion you like. Separately, you and your spouse are 55+yo and therefore each of you can make an additional catchup contribution of $1000 (total $2000), however, you can only add your $1000 to your account, but your spouse would need to add his/her $1000 to his/her own separate HSA account (would have to open one if he/she does not already have one. HSA accounts are individual, not joint. If the healthcare plan is through an employer or marketplace, and it already came with an attached HSA account, that account is likely in the name of the subscriber to the plan which is probably you, but you need to check. That is perfectly fine to add your family contributions, and $1000 catchup for yourself, but your spouse would need to open/have a separate HSA account for his/her other $1000 catchup contribution. Even if you keep two separate accounts, since you were covered by the same plan, the funds can be used for eligible medical expenses for both of you. This is how I understand it. Your tax advisor may be able to provide more info. You are still in time until the filing deadline to make the other $1000 catchup contribution for 2023 if you did not know to do it last year. For reference, see IRS Publication 969, sections for “Contributions to an HSA” and look for “Rules for married people” on Page 7. Hope this helps.

[@heidikamrath1951]

@@annethomas5662 Fromwhat I’ve learned in comments here and elsewhere, the HSA can be a Family account, and that sounds like what you have. When making the additional 1000 catch-up contribution, that can only be used once per account (per year). If you are both 55, one of you might look into getting a separate HSA (or both of you do it and stop funding the Family Account). This way you can each contribute the additional 1000 for the catch-up contribution, whereas otherwise your Family Account could only accept 1000.

[@hung8582]

oooh man, thanks for this vid!! I have HSA but totally forgot to setup my investment acct. missed out on the recent market run but better late than never! thanks again!

[@Theretirementnerds]

Thank you for tuning in!

[@gstrainscoming9]

As someone has started a HSA, I love the concept. However, medical costs have skyrocketed. In the case of an emergency, nevermind if you have kids, one feels a bit exposed with a high deductible health plan.

[@mikepankratz9702]

My employer also contributes to my HSA account, does the six month prior to starting/applying for Medicare count for them also. I am 67 and getting ready to retire in six months. I really appreciate this as I would’ve continued contributing to my HSA account up until I started Medicare. Thanks, Mike.

[@mikepankratz9702]

They contribute $3500 per year

[@Theretirementnerds]

This video will help A LOT with that question. kzbin.info/www/bejne/rnzYiXiln9uXo6M Yes, the 6 month lookback applies to your employer

[@stevemiller1937]

I like the way you explained how to reimburse yourself. I didn't know that about it. We just switched insurance to a high deductible plan with an HSA. I'll divert some funds from solo 401k to start funding HSA. Thanks

[@Theretirementnerds]

Thank you for watching! One way we handle the receipts is we take a picture and email it to ourselves with the YEAR HSA Family Member in the subject line so we can look them up easy in the future. Other friends will set up a separate email account like FamilyHSA@gmail or something and do a similar idea. Hope that helps!

[@stevemiller1937]

@@Theretirementnerds love it! Thanks!

[@Lanafromarcher]

Increasing tax rates are the reason I rolled over my 401k to a Roth. I don’t want to be 59 paying taxes on current income on withdrawals made from my retirement account.

[@roberttheodoregeorge]

Pre-tax contributions may help reduce income taxes in your pre-retirement years while after-tax contributions may help reduce your income tax burden during retirement.

[@JennaHerberholz]

Both have their perks but you can also save for retirement outside of a retirement plan, such as in an individual investment account or employing the services of a retirement planner/investment advisor.

[@SaintYvess]

I have thought about it, but haven't figured out how to get consultation, I don’t live in a big city.

[@Carl_McMelvin]

Stop voting for democrats.

[@mell1650]

Noice ;) ... I do exactly everything as you mentioned. I am on year 1 at 52 years old and am excited to see where the next 15 years of it go till I retire.

[@Theretirementnerds]

Awesome! Is that a Brooklyn 99 reference with Noice? 🙂

[@JLMLawliet]

Lets get this important information out there. If you plan on working to 67 and the place you work at has 20 or more employees and offers a group health plan you do not need to apply for Medicare at 65. You can wait until your turning 67 and continue to put money in your HSA. So many people are told by friends or family that you must apply for Medicare at 65 and that is not always true. I plan on waiting myself. Now applying for Medicare at 65 could lower your out of pocket cost of insurance depending on what kind of insurance coverage you have at work but if you save those receipts you can reimburse yourself.

[@Theretirementnerds]

Thank you for watching! This video goes over all of that: kzbin.info/www/bejne/oKi0fKGdfbhosKs Hope that helps!

[@robertplemmons3321]

Superb video! Concise, packed with useful information, and very well presented. Nice job, man!

[@Theretirementnerds]

Thank you so much, Robert!

[@victmancans4350]

The cool part is that you can roll over the HSA to long term plan and choice a reimbursement plan that you can get cash.

[@tantotanto9408]

One final tax benefit that took me by suprise: your withdrawls in retirement dont get factored into your social security tax calculation.

[@Theretirementnerds]

Excellent point!

[@shankarh6915]

Quite the eye-opener! Thank you so much for this! 🙏🏽

[@CodyCEngdahl]

Thank you. This is exactly the video I was looking for.

[@Theretirementnerds]

So glad it was helpful! Thank you for watching Cody!

[@jayroc5807]

After seeing other videos on HSA’s you explained it so well I understand it now!

[@Theretirementnerds]

Thank you so much!

[@davidfolts5893]

The sharpest healthcare and financial KZbinr and all-around nice guy, Erik is his name.🎯🎯🎯

[@Theretirementnerds]

You are too kind David. Too kind. Appreciate you!

[@davidfolts5893]

@@Theretirementnerds Right back at you.

[@laurice8056]

I really need people like you to make videos that help explain all of this to me. This way we can freeze and reverse the video and listen to it when we need to. All of this seems so overwhelming that it makes my head spin.😵‍💫 LOL, Thanks for sharing! Btw, I’m hitting the Subscribe button Now!😅

[@Theretirementnerds]

Thank you much for subscribing! Glad this is helpful :) We'll keep trying to put out useful content for you!

[@ShellyWest-d8x]

Thank you, I'll be starting with an HSA through my employment soon and this answered a lot of my questions.

[@TrangNguyen-xd2ep]

Very helpful information. Thank you!

[@Theretirementnerds]

Thank you for watching!

[@anilshah1029]

Best video I watched on HSA - Kudos!

[@Theretirementnerds]

Thank you!!

[@EvoSchecter]

Dude. @6:00 you're being real. Not many KZbinrs show that anymore.

[@Theretirementnerds]

Thank you!

[@Jimmylikesthat]

Yeah, at the 6 min mark I immediately went to the comment section. It caught me off guard by how cool that was 👍

[@Search4infinite]

Hack#0, if applicable use LPFSA first (some employers provide it for dental and vision expenses) which is pretax and you don't have to spend post-tax/out-of-pocket money. Most HSA has 100-1000 dollars buffer before investemnt rleased to this buffer. So one can djust this buffer. This buffer comes 2nd when you use your card (example MetLife LPFSA + HSA card) after LPFSA allocated money is used. LPFSA can be adjusted between 0-xxxx based on your familt/tax situation and anticipated usage for dental and visioj out of pocket expenses.

[@Nova-m8d]

Great info

[@Theretirementnerds]

Thank you!

[@ericgold3840]

The 'bummer' mentioned regarding HSA ineligibility of Medgap premiums can be a blessing in disguise because the HSA *can* pay for Medigap deductibles. With a big enough HSA, Eric the Medicare Agent could reasonably ask "is there any reason to NOT enroll in HDG ?" Personal note: I was clued in early to the goodness that is HSA, but I didn't invest early on, and I used the HSA for medical expenses as they cropped up. I could have done much, much better, and bankrolled our Medicare costs for life. And just to rub a little salt in the wound, a properly managed HSA would have eased my current RMD issues.

[@htrabj]

This video is so great and helpful - you just gained a subscriber 🎉

[@Theretirementnerds]

Thank you! Appreciate this so much!

[@Libretad-cw4cb]

Another possibility is that 30years from now the rules changes and now you got stuck with a chunk of money that you can only use for medical expenses

[@Theretirementnerds]

Anything is possible :) Let's hope that doesn't happen

[@heidikamrath1951]

That would suck--what would suck more is having a bunch of medical expenses that you couldn’t pay for. 😉

[@markstone6263]

Great part is not only do you save our marginal tax rate on the way in, but FICA taxes as well. So, if you were to eventually use it in retirement for non-medical expenses it would still be better than a traditional IRA, bc you wouldnt have to repay those 7.6% of FICA taxes! Also, if you dont have the money to max out or significantly contribute to an HSA, just open 1 and put in like $100, bc I believe that would start the date form which you can at least start saving your medical bills, so then in later years if you max it, you will have more bills saved up then

[@Theretirementnerds]

Thank you!! Great points!

[@AmandaCrane-h5f]

This was so helpful! Thank you, do you have any videos about whole life insurance policy and tax benefits for those? I’d love to know more about that as well. Thanks!

[@Theretirementnerds]

Thank you for watching! This one touches on it a bit: kzbin.info/www/bejne/bqamYp-doL-Ijac

[@timinator8652]

Uninvested cash in a fidelity HSA account earns market interest rate, which is about 5% currently.

[@brandon8531]

What does that have to do with HSA’s?

[@timinator8652]

@@brandon8531 I've edited my comment to clarify that this is for cash in a fidelity HSA account 🙂

[@heidikamrath1951]

That’s great! I don’t think my uninvested cash at HSA Bank earns anything!

[@le9051]

The part about the HSA I didn't hear you discuss was the fact that the type of plan you are on is a high deductible which means if something happens to you you have a high amount go out of your pocket. Also means no co-payments you have to pay the difference between the negotiated Network prices for medical expenses outside of a few Wellness checks. I was surprised to find out a routine skin exam is not a wellness check so I had to pay for it out of pocket. I'm not really tracking out-of-pocket expenses I anticipate they will not add up to much. Generally these plans are very low premium from your employer and then you are freed up financially to contribute to the HSA, besides that I wish I knew about HSA a lot sooner!

[@ShamsoShera]

I have to say, while the idea of maximizing the benefits of an HSA is intriguing, it feels a bit like exploiting loopholes in the system. Shouldn't healthcare be about taking care of people, not finding ways to manipulate tax systems?

[@thorasguardselectrician2013]

Ffs 🤦

[@curthoaldridge507]

This should not have 66 likes. Consumers and taxpayers are not the problem. Educate yourself or continue to get steamrolled by the rich and greedy!

[@DinSea19]

Lol do some research into how the healthcare system actually works in the USA and how bad you're being overcharged. If anything hsa advantages don't even come close to making our healthcare system affordable for people that don't qualify for subsidies.

[@lordlee6473]

You could also invest your HSA money and run into the big stock crash that happens every 10 or so years that pretty much reset all your gains if not put you into negative territory, and what if you need to withdraw money for a major medical expense at that time. You have to be really lucky to have compounded growth. No one can time the market

[@delt2575]

I would love to retire early and use my HSA funds to pay for health insurance premiums, but the IRS doesn't allow this. Makes zero sense other than trying to force people to work until 65.

[@UTubePhoenix]

Thanks for great video, just subscribed.

[@Theretirementnerds]

Thank you so much!!

[@miragexl007]

Wow. Just learning about hsa..

[@00tich]

Sounds great if you have the means to pay for medical expenses from non HSA sources. I think most people dont

[@Erock181]

Solid video! I've been in the employee benefits space for the past 8 years, with a big focus on HSAs. This video should be shown at open enrollment meetings! There's such a gap in HSA education, with a large amount of account holders just sitting on cash. A financial advisor I partner with once told me 'an HSA is the most powerful investment vehicle out there.' Thank you for putting this together.

[@Theretirementnerds]

Thanks for watching! We love the HSA. Feel free to share with your groups 🙂 We work in the employee benefits space helping with Medicare, so we know the conversations well...

[@335i101]

Also, something that was sort of mentioned, but not too clearly…. HSA contributions, assuming they are funded with deferrals through an employer plan, are not subject to payroll tax. Which is an additional layer of tax savings. This differs from 401(k) Pre-tax contributions which will lower your taxable income, however you still pay payroll tax on the these deferrals.

[@moonshynegirl172]

I had no idea. My HSA has been sitting there for 5 years.

[@Theretirementnerds]

Now you know :) Get that workin' for you!

[@chaselesser3191]

I thought about it. I will try and max out my HSA at $8k and just use those funds if needed. But invest anything over $3k-$4k.

[@Theretirementnerds]

Very similar to my strategy :)

[@spoonee]

Great video. Very well done. Thank you.

[@Theretirementnerds]

Thank you so much!!

[@anywherebob]

What are the considerations for choosing between HSA and Roth IRA?

[@Theretirementnerds]

Quite different accounts. Roth IRAs are specific retirement accounts built to use as income after age 59.5. Roth contributions are taxed. Roth growth and withdrawals have a lot of flexibility and are tax-free. HSAs are built for healthcare expenses, but have a nice benefit after age 65 of being opened up to use in different ways. Contributions are tax free, growth is tax free, and withdrawals for qualified expenses are tax free. That's where the strategy in the video comes - if you are able to pay for medical costs out of pocket and invest the HSA, later in life, you can reimburse yourself tax free and then use those dollars later however you want. Very different accounts. Many people have both. Hope that helps!

[@anywherebob]

@@Theretirementnerds - Thanks for the engagement on this comment. I have annual medical expenses that are approximately equal to my annual contribution limits for the HSA. So, I'm choosing between reimbursing myself (and funding a Roth) or just leaving the funds in the HSA. Leaving the funds in the HSA will give me some of the same features of Roth (tax free growth, ability to access contributions via medical receipts) while setting me up to efficiently cover health expenses during retirement. The tradeoff for me is (I think) is that I expect to retire before 65 (possibly even before 55) -- so I am thinking that a Roth (with ladders...) gives me more options in that early retirement window. Does anything else jump out at you that I'm overlooking?

[@frameofmind8800]

Nice; you missed the fica tax benefit via payroll deductions

[@Theretirementnerds]

Great point! Another benefit :)

[@cap5477]

Thank you for the helpful information

[@Theretirementnerds]

Thank you for watching! 🙂

[@aaronhafeman7056]

I heard that your HSA becomes similar to a traditional IRA at 65. Where you can use it for anything you want. Its only subject to income tax. I think that is also another way HSA's can supercharge your wealth.

[@Theretirementnerds]

You are correct! The advantage of an HSA at that point is that there are no required minimum distributions (RME) that come with a traditional IRA.

[@aaronhafeman7056]

@@Theretirementnerds My goal is to contribute as much as I can to HSA until 65. Keep paying for medical expenses out of pocket if I can. I track my medical expense by uploading receipts to a cloud account and keep a running total on an excel spreadsheet. Then I hope to allow my HSA to grow to become a traditional IRA for retirement. Obviously along the way if my wife or I need to draw from it we will. HSA can be even better if your employer also gives you pretax payroll deductions into an HSA that has investment flexibility.

[@DrBrandonSchultz]

Great content!

[@Theretirementnerds]

Thank you so much Dr. Brandon!

[@007vkg]

Great advice 👍

[@LEADERINFRONT]

There are 5 states where the triple tax advantage doesn't apply. In California we have to pay taxes each year on dividends and capital gains in the HSA.

[@PrincesitaDeMagazine]

Which are the other 2 states?

[@HikingUtah]

It's hard to think of an HSA as an investment account when I don't generally have access to it, other than for medical expenses.

[@dathat555]

Unfortunately California and New Jersey tax any realized HSA income, such as dividends, even if nothing is withdrawn from the account. Still a great investment vehicle, just less so in those two states.

[@Theretirementnerds]

You are correct! Always exceptions 🙂

[@lukemoltense9535]

Havent paid myself off since 2019. Accrued 45k since then.

[@Theretirementnerds]

Nice work!

[@jodidoz5927]

First time watching ur videos and must say im super impressed and have subscribed. Will follow ur channel now. Just started getting financially literate myself. Quick question, when an employer contributes to your HSA, is it in addition to the family max of $8350 or just to make up the family yearly match? Thank you.

[@Theretirementnerds]

Thank you so much! It is not an addition to the max. The employer contributions plus your contributions cannot exceed the annual max. Those who are 55+ do get an additional $1000 in catchup contributions. Hope that helps!

[@jodidoz5927]

Yes it does. Thanks

[@Bill123321]

@jodidoz5927 As @90DaysFromRetirement mentioned, your contribution + employer's should not exceed the annual limit. If you exceed that limit you need to call your brokerage where HSA is and withdraw the excess amount before IRS penalizes you.

[@harsharao3555]

Nice video. Thank you.

[@Theretirementnerds]

Thank you so much!!

[@g.t.richardson6311]

It was only offered by my employer the last couple years I worked .. very small low low 5 figure balanced Wish I’d have had one for 25 years My wife has had one for about 4 years, she has over 30000 in hers, she has a couple more years , it will be over 50000 easy , best we could do since our employers didn’t offer them till I was 58, retired at 60, and she was about 54 when it started

[@Theretirementnerds]

Time, when it comes to money, is a powerful tool. Good to hear she has that option and is maximizing it! Thank you for watching and sharing!

[@baileygrib]

I’m new to HSAs and this may be a simple question - say I’m “Eric the Investor” and use an HSA to invest in funds. How is an HSA beneficial compared to a 401(k) where employer matched contributions are common? Asking this without any potential awareness that employers also match contributions to an HSA… so I’m not sure

[@Theretirementnerds]

Great question. Yes, employers can also contribute to HSAs. The big benefit is tax deductible contributions, tax free growth, and tax free distributions for qualified expenses. In a perfect world, you and your employer are contributing to both 🙂

[@sunshinegurl1474]

QUESTION: When investing the HSA, are the returns received from the investment considered a 'contribution' creating a tax issue with Medicare's 6month look back? If you stop contributing funds for the 6 month look back, but the HSA continues to grow, due to investment, is the growth considered a contribution?

[@Theretirementnerds]

No, growth is not a contribution. The 6 month rule is a tricky one that gets misunderstood quite often. If you haven't seen this video, it clarifies: kzbin.info/www/bejne/rnzYiXiln9uXo6M

[@sunshinegurl1474]

@@Theretirementnerds Thank you!

[@jmullens31]

Man, I wish I could save and/or invest my HSA. It all gets used for medical

[@Theretirementnerds]

That is definitely a reality. There is a difference between theoretical and real life, for sure.

[@ramyareddy370]

What happens to this account and money in it after I die? can my spouse and kids use them ?

[@Theretirementnerds]

Spouse can use it with all the same benefits (triple tax advantages). Kids can inherit it and money is taxed as income.

[@jonathanfoster2263]

I would like to do a IRA to HSA rollover but as of now my employer health plan doesn't qualify me to open one. I will be able to open an HSA in the month i retire if I get a high deductible plan

[@ethan3942]

Great video! 🙏 btw just curious what brand is your shirt.. I like the style 😎

[@Theretirementnerds]

Thank you for watching! Primo Golf Apparel 🙂 primogolfapparel.com/collections/primo-tops Have a sports event I run that gets a discount if you want them. Discount code is MANGAMES

[@Alan-hc6qi]

I live in California though

[@Theretirementnerds]

Ya... California is special

[@robertmaier8959]

I don't understand how paying for medical expenses out of pocket are supposed to save money. It's basically a wash. I did a 25 year simulation of maxing out HSA contributions and paying $5k/yr in medical expenses and either: A) Save all money in HSA and pay expenses with taxable income B) Pay for all medical expenses with HSA and save the taxed income money that would have paid for expenses in A in the same high yield account. After 25 years the total net worth is a wash. The tax man taketh either way.

[@brandotex]

Yep pretty common knowledge

[@stevenmeulink2177]

Keep in mind that HSAs are tax inefficient at death. Consider submitting qualified medical expenses immediate instead of letting it grow and use those reimbursements for Roth contributions or conversions which also enjoy tax free growth. You still get the triple tax advantage but in a way that is more advantageous for your heirs. Alternatively, consider listing your favorite charity as the HSA beneficiary at your death.

[@Theretirementnerds]

If there is no spouse, correct. The spouse still gets the tax advantages, but children or a trust do not. Great comment!

[@mamat792]

Let's be honest. If you are wealthy, an HSA can really benefit you. If not it's really a struggle to meet and pay for your deductible, and you are likely not getting care when needed because it is just too expensive. A company should NOT only be able to offer an HSA. They should be mandated to offer another plan that is affordable for those not making the big bucks. This based on my experience as a fairly healthy adult (Things come up!), over the past 5-years on an HSA plan.

[@johnjohn40100]

That's so odd how the catch up is at age 55 for hsa, when 401k is at age 50. The hsa acts almost like a 401k.

[@Theretirementnerds]

It is strange. Keeps us all on our toes 🙂

[@charleschen4766]

Hope you would cover the case that you have to apply for Medicare because of retirement, but you did not stop HSA contributions for last six months. There should be a way you can fill a form and withdraw the contributions so they become taxable income. Correct?

[@HeadingForTomorrow]

Most plans are not High Deductible anymore, and if you get it from your work, you can't pick and choose the plan usually they won't even offer the high deductible option. When you finally find one, then you realize premiums are not that much lower to make sense to save the difference and pay for expenses out of pocket.

[@Carl_McMelvin]

Not true. Most plans are high deductible. 😂

[@HeadingForTomorrow]

@@Carl_McMelvin Do you mind sharing some example that's a high deductible but actually makes sense to get because of lower premium?

[@Carl_McMelvin]

@@HeadingForTomorrow wtf are you talking about dude.

[@Random-yq1wu]

Investing HSA has too many restriction, minimum, & fees before any money is invested. Its more optimal to use HSA on qualified expense right away & invest savings on Brokerage, T-ira, roth, or 401K. HSA investing is only optimal for people who can max out 401K & IRA accounts. Because they need more tax breaks.

[@rachelhartter2510]

How does the reimbursement work? Example: I pay dental cleanings out of pocket as I go to an out of network dentist. I submit a claim to my insurance to get reimbursement. I am not fully reimbursed. Will the HSA know I already received a partial reimbursement and will only allow me to reimburse myself the difference?

[@Theretirementnerds]

You'd be checked on the receipt from what you paid out of pocket, so hold onto receipts or take a picture and email it to yourself with HSA Reimbursement Receipt in the subject line (or whatever works for you) so you can easily search for it later.

[@rachelhartter2510]

@@Theretirementnerds thank you

[@HeavenlyAngels85]

You confuse me , what do you invest if you don't use money . Pay out pocket for medical bills???

[@slappyhour9am977]

I know I can invest. But it's at a bank. Where can I move it to invest

[@Theretirementnerds]

There are a lot of different HSA custodians with investment options. The bank may have them, just need to ask. Health Equity, HSA Bank, Optum Bank, and Fidelity are just 4 or many custodians that have investment options.

[@fffogg]

Hello. I am not really understanding this video. I currently have an HSA account. I have to set the amount in advance through my employer the year prior through our open enrollment period. I charge my medical expenses, doctor visits, etc to the HSA account, but at the end of the calendar year any excess funds up to around $570, I was told, would carry over. Nothing over that amount. So how do you save/invest to these large amounts that you are noting in this video when they are capping me at a $570 rollover? Thank you.

[@Theretirementnerds]

Hi there, what you are describing is an FSA, not an HSA. FSAs work differently and, typically, have the use-it-or-lose-it concept you are describing. Another account type you could have is an HRA. Works similarly to what you described. FSA - you and your employer can contribute. HRA - just your employer contributes. Hope that helps!

[@Paulsapartment]

Can I still contribute to my HSA? if it’s my husband that is retired 68 and just started collecting ss 5 months ago. I am still working and 64. I know my company stopped adding his portion of their contribution to my HSA but I am still adding money but not my husband

[@Theretirementnerds]

Yes, as long as you are still covered by a qualified high deductible health plan, you can make contributions. If it is just you on the plan, you have the single max plus $1,000 catch up contributions. If you have you and a dependent (spouse or child) on the plan, you can contribute the family max.

[@Paulsapartment]

Thank you for that second paragraph because I forgot to put that information in that my husband is on my plan and he has Medicare A. It doesn’t use it at all. Second question, if I may, I’ll be 65 in Oct so do I need to apply for A ? I’ll be working to 67

[@Theretirementnerds]

@Paulsapartment no, you do not need to apply for Part A, in fact, from what you've shared, you should not apply for Part A. If you did, you would have to stop HSA contributions. Now, if your company plan is very expensive, that changes things. But if it is a solid plan with good costs, don't take Part A

[@Paulsapartment]

Thank you thank you thank you I will not apply for part a now because of your information. Just thank you so much because all I’ve ever heard is about how I have to apply for part A no matter what otherwise I’ll get a penalty.

[@Theretirementnerds]

@@Paulsapartment this video will help 🙂 kzbin.info/www/bejne/oKi0fKGdfbhosKs

[@zacharymarkb]

How does the age 65 rule play out if you and your spouse are of different ages? Can I take it out penalty-free if I am 65 but my wife would be 61?

[@Theretirementnerds]

It's all tied to the account owner. HSAs are individual accounts. You and your spouse can each have your own HSA, but the 65 rule will be based on your HSA. You can use HSA dollars for dependents, so if it is your HSA and you want to retro pay for your wife's expenses given the guidelines in the video, you can.

[@kiritparekh]

Thank you for detailed view on HSA; it changed my thinking. Question: Can we reimburse the international medical expense from HSA Account? For example; I went through a surgery in India, will it be eligible for the reimbursement? Thanks in advance.

[@tankberserkererer]

Hack #2 and #3 seems like they should’ve been combined into one. Don’t spend your HSA dollars BECAUSE you can reimburse later after the account has grown.

[@CameronAmadio]

My employer offers an FSA. Does this video still apply?

[@Theretirementnerds]

No, not really, but this one would: kzbin.info/www/bejne/aKayqah6eMegq80

[@s.7.7.74]

What if my employer don’t offer hsa. Only offer fsa.

[@Theretirementnerds]

Generally, you can’t have both and FSA and an HSA at the same time, with exceptions. This video goes over that a little more: Which Healthcare Account Will Save You More Money? HSA vs HRA vs FSA kzbin.info/www/bejne/aKayqah6eMegq80

[@Dimsum256]

Umm obligatory California comment. California taxes HSA growth -- all growth in HSAs no matter which state you originally put the money in.

[@Theretirementnerds]

Correct! If we could pin 2 comments we would. New Jersey also falls into this category

[@laceylaw7745]

Do I need to have an HSA at the time the medical expense occurred in order to reimburse myself later on?

[@Theretirementnerds]

Yes, you do :) Great question

[@jscholex]

Can someone post the 4 TLDR tips? Thank you fam

[@Theretirementnerds]

Sure thing! 1. Invest your HSA dollars 2. Pay for Qualified Expenses out of pocket to allow HSA dollars to grow 3. Reimburse for past expenses - in retirement 4. At or after age 65, HSA dollars can be used for anything with no penalty. If it is for non-qualified expenses, it is treated as regular income and taxed. Bonus Hack #5 - To document healthcare expenses over the years, send yourself an email with the receipt and consistent subject lines "YEAR_HSA_Expense Description_Amount" Or, create an email specifically for receipts Name.HSA@gmail... and send all emails there. Hope that helps!

[@maherb8744]

I need some advice. Is it possible to connect with you offline?

[@Theretirementnerds]

Shoot me an email to [e-mail] and I'll see if I'm the right person 🙂

[@PhongNguyen-nz9kz]

How do you put 5k in an HSA? I can only put max of 3500

[@Theretirementnerds]

Families/couples are around double. Individuals can contribute up to $4,150 to their HSA accounts for 2024, and families can contribute up to $8,300. Hope that helps!

[@cnguyensfca]

How much does a divorced parent who pays for herself and a dependent child contribute to hsa annually? i.e. Contribute amount for an individual limit or family limit?

[@Theretirementnerds]

@@cnguyensfca if you and a dependent are on a qualified high deductible health plan, you can contribute the family max 🙂