How To Maximize Your HSA // Step-By-Step Blueprint

[@TaeKimFinancialTortoise]

► Download Your FREE HSA Expense Tracker + PDF Companion Guide: financial-tortoise.ck.page/a781be1ea7

[@krinkton23]

I CANNOT emphasize how much i appreciate you jumping right into the topic at hand

[@thomaslunden]

It's worth mentioning that you only avoid FICA taxes if you contribute through your paycheck. If you contribute from a linked bank account, you'll get a break on income tax but not on the payroll taxes. Unlike 401(k)s, you CAN transfer assets from one provider to another WITHOUT leaving your job. My company contributes to my Health Equity HSA. I don't like their fees, interface, or requirement to maintain $1000 cash. Once every other month or so, I fill out a form on Health Equity and they then send my assets to my Fidelity HSA.

[@Chess.Challenger]

I do this exact same thing; except my employer HSA can't be invested rather than having fees. Still transfer it over to the Fidelity HSA regularly.

[@TheQUBANQT]

I do something similar every quarter also transferring to Fidelity. Fidelity seems to be the best in the market for HSA in my.

[@DallinBunnell]

I do this also!

[@jeannettedrown7687]

Great content. I use my HSA in all the ways you recommend. I like all your hair comments. I get a chuckle every time. I like your current hair style, but to be honest, I liked your old hair style better. But, your new style still looks good!

[@rays3277]

Thanks Tae! Very informative. If someone does not qualify for an HSA, what’s another option? Keep up the great work!

[@Chess.Challenger]

Sadly, there's nothing quite like it. You could look into a FSA (Flexible Spending Account); some of the same advantages like tax breaks for qualified medical expenses, but notable downsides. You can't roll funds over from year to year with most FSAs, which prevents you from gaming the system in the way you can with HSAs.

[@hakune4724]

If you think you know all about HSA, go to step 6. Genius!

[@livingunashamed4869]

No RMDS! Its like a pre tax 401k (at worst) but uncle sam never comes knocking. Best investment vehicle out there.

[@CruisingwithLocstar]

Agree it’s the best. One downfall Compared to a 401k or Ira is when you die if it goes to a non spouse they have to liquidate immediately and pay the taxes on it. They don’t get the 10 years to draw down. That and California screws you on taxes on the investments and no deduction But it’s great for everyone else for sure (maybe not NJ, can’t recall)

[@SilverCpa]

HSA is the apex predator of retirement accounts.

[@thomaslunden]

It's a shame only a small percentage of HSA owners actually treat it like the apex predator it is.

[@SilverCpa]

@@thomaslunden I tried telling some friends. They "will look into it" but never do. Pains me to watch them leave so much money on the table.

[@thomaslunden]

​@SilverCpa you can lead a horse to water but you can't make him drink. I've gotten a few coworkers to open Roth IRAs and HSAs, but there's one in particular who I've been trying to get to open an HSA (free money from our employer and he's already on an HDHP) for a year now and it's the same thing. "I'll look into it." "Bro, if you pay off your credit card, you'll get a 25% raise. If you take ten minutes to open an HSA, you'll get free money." "I'll look into all that [but in the meantime, I'll just keep complaining about how I don't make enough money AKA I'm just bad with money]."

[@Chris-ul4sm]

Great information! Thank you, Subbed! The link for the expense tracker is not working for me.

[@NikStar210]

Thanks!

[@TaeKimFinancialTortoise]

Thank you!

[@thomaslunden]

While there's no time limit on reimbursing yourself, you can only reimburse yourself for medical expenses that you've incurred after the HSA was opened.

[@littlebob1261]

Your videos rock man, thank you

[@fredswartley9778]

I love the HSA. Triple tax advantages. How do you reimburse yourself for a qualified medical expense?

[@Chess.Challenger]

You simply withdraw from the account in whatever way is available; likely transferring to your primary bank account. If a reason is required to process it, you just say it's for a medical expense. You only need the receipts on the off chance the IRS audits you.

[@kenichi407]

hey tae, perhaps an idea for a future video. my wife and i always debate about the ideal budget we should have for food per month. it gets down to nonsense about buying organic vs non-organic, foreign vs domestic, brand vs no brand... we have a daughter, and she believes she only deserves the most expensive (assuming it's the healthiest). what's a good way of approaching and any practical dollar amounts (by gender/age) would be helpful.

[@Nrqsrt]

Thank you

[@MichaelLudden]

Brilliant 🙏

[@peterl2767]

Great content 👌 👏 👍

[@mshivakumar447]

Uh! I didn’t realize that we can claim bills after many years down the line. Cool!

[@VanJR.]

I’ll have to rewatch this video because I’m still confused about it all lol I have 3 days left to sign up for insurance and my employer offers this

[@CruisingwithLocstar]

Note to folks you can’t have a medical fsa and hsa at the same time. You can have a limited fsa where it covers vision and dental but no medical.

[@abluelark]

Tae! New Hairstyle?

[@brucestiles6477]

I'm on Medicare, so I am not eligible for an HSA. However, I understand that if you are able to avoid FICA taxes on your contributions, they must be deducted from your salary. I don't think that you can contribute them out-of-pocket and not pay FICA taxes, although you can deduct OOP contributions. Worried about not having "enough" medical bills in retirement to use up your HSA savings? Tae did not mention that you can use HSA funds to pay for Medicare co-pays and Medicare Part B and Part D premiums. You can also use HSA funds to pay for long-term care (LTC) insurance. (You cannot use HSA funds to pay for Medicare Supplement policies.) In 2024, the premium for Medicare Part B is $174.70 a month, i.e., $2096.40 for the year. Let's round that to $2100. The life expectancy of a 65-year old retiree is about 20 years. So, even if you never make any claims under Medicare, your lifetime premiums can be expected to be about $42,000 *in today's money.*

[@ZagsElite]

One day I will splurge on that PLASMA screen🤯

[@ZagsElite]

and maybe a top of the line laserdisc player to go with it

[@ShonryuB]

New to putting money in am HSA. My company offers one but Im interested in possibly just using Fedility. How does that work from the tax perspective since my company would normally pretax it? Would I just essentially get the tax deductions when I file at the end of the year vs upfront with my employer doing it?

[@Chess.Challenger]

Essentially, yes. In either case, contributions will function like traditional 401k or IRA contributions and count as deductions towards your taxable income for the year. However, if your employer allows you to make payroll deductions, you may want to make use of that to avoid paying FICA taxes on those dollars. If you contribute from a bank account, you'll miss out on that benefit of the HSA. If you don't like your employer HSA but want to legally avoid some FICA taxes, you can make payroll contributions to your employer HSA, then use a transfer of assets process to move funds from there to your preferred HSA. That's what I do; it's extra work, but I get the best of both worlds!

[@ShonryuB]

@@Chess.Challenger Thank you for the quick response and for breaking this down. I really appreciate it.

[@nikkig1146]

Can someone help a newbie out? An HSA is a great idea, but let's go back to basics. What is a HDHP and how do you know if you should choose it over your employer's primary healthcare plan? Also, what if your employers limits how you can invest your money? For example, my company HSA is through BoA and doesn't offer Fidelity or Vanguard index funds. Do I have to go through my employer or can I set one up independently? Then, what type of medical expenses does it cover (medical, dental, vision, plastic surgery, etc).

[@Chess.Challenger]

HDHPs (High Deductible Health Plans) should be clearly labeled as such when you're comparing the plan options. Compared to other health insurance plans, they tend to have lower premiums (amount you pay monthly in order to keep the insurance), but higher out of pocket costs (you pay more for medical care; insurance covers less). Unfortunately there's no hard and fast rules; everyone's medical situation is different, and every employer offers different plans. There are online tools to assist with the decision-making if multiple plans seems like strong contenders; I'd look into that. My employer actually has a staffed phone number during open enrollment to assist with this; look into it! If your employer sponsored HSA has restrictions you don't like, you can simply open another one and transfer the funds! There may be benefits to keeping the employer sponsored one (in my case, I get $1600 each year, and also avoid FICA taxes if I make payroll contributions, which I do), but unlike with 401k accounts there's no restrictions on transferring funds between your HSA accounts even while you're still working there. I regularly transfer funds from my employer sponsored HSA to my Fidelity HSA for precisely this reason. It largely covers everything; everything I've personally checked at least. Check the source for more info: www.irs.gov/publications/p502#:~:text=This%20publication%20explains%20the%20itemized%20deduction%20for%20medical%20and%20dental

[@CruisingwithLocstar]

You have to evaluate your own circumstances like how much you tend to use medical insurance. As well compare the premium savings. It can often make up a large difference in the higher deductible. You usually can have your hsa at work and open one either way a place like Fidelity. Transfer the funds every so often and invest through them. You’d want to keep the hsa contributions coming from your payroll to get the fica tax advantage. Hsas cover medical, dental and vision. You can get a more thorough explanation by googling what and hsa covers. But it’s a broad arena. Not sure about elective procedures.

[@nikkig1146]

@@CruisingwithLocstar Thanks for the response!

[@lemon4652]

What i do not spend in my HSA is forfeited at year end. What did I missed? Must be a different type of hsa ....

[@baddboo]

Noob question: Can I have a HSA, but I have a lifetime medical for my employer?

[@Branflakes1234]

"Plasma screen" 😂

[@kelmike060404]

My husband turns 55 next September. Are we eligible for the extra 1000 in 2025?

[@attgig]

So what are the triple tax break? Is it save on income, then fica then withdrawal for medical expenses?

[@XGuard04]

You don't get taxed on capital gains that you can eventually use on future medical expenses.

[@CruisingwithLocstar]

@@XGuard04unless you’re in Cali then you pay state taxes on contributions and cap gains.

[@CruisingwithLocstar]

I know you can’t get into each state’s specific rules but California really screws you. You not only don’t get the tax deduction you are subject to taxes on dividends and capitals gain that your investments produce. Really takes a bite out of how great this account is.

[@scottroth7796]

Tae can you maybe do a video for people in California & New Jersey about this? Do the numbers still come out ahead?

[@moredatesmorefiber3526]

What happened to the hair? It’s been looking flat recently. I liked the style you had before

[@jeannettedrown7687]

All there RMD's on an HSA after 65? Maybe I missed that in the video.

[@TheVastoLordes]

Nah there's no required minimum distributions on them

[@thomaslunden]

No. Before 65, withdrawals for unqualified expenses (unqualified medical or non-medical) are taxable and penalized. After 65, unqualified medical expenses are taxable but not penalized. The taxability is the behavioral overlap with traditional IRAs.

[@CruisingwithLocstar]

Nope. But the only con is when you die if it goes to a non spouse they have to liquidate and pay taxes on the full amount. No 10 year draw down Like Ira. So make sure to spend as much as possible before you go. lol

[@jeannettedrown7687]

@@CruisingwithLocstar Thank you. I learned something!

[@cnewt00]

LOVE THE CONTENT hate the haircut 😒

[@ExtraGuac007]

Volunteering to open an account that lets the government and healthcare administrators dictate how you spend your money is never a good idea. You're gonna have fun with the "Letter of medical necessity."

[@Recise]

z

[@artemrevelsky]

Have fun tracking all of the medical expenses, audited by IRS. On top of that many HSAs have minimum cash balance anyway so you might as well use it instead of just letting it sit doing nothing.