The Hidden Truth About an HSA (Health Savings Account)

[@BadPhD777]

Keep in mind that money in an HSA will be taxed if it goes to your heirs. Money in a Roth IRA is tax free for your heirs. With that in mind, I am prioritizing using my HSA before my Roth in retirement.

[@briand.1694]

Definitely! From what I have learned over the last couple of years planning for retirement, we should use the funds in our Roth IRA last.

[@mylesgray3470]

The income requirements need to be raised on the Roth. A lot of us in tech cities make too much to invest in them, even though our wages are about average in the cities we live in. The HSA has no such income cutoff to qualify, which is nice.

[@Senthiuz]

I wouldn't say the Roth is tax free, more pre-taxed.

[@BadPhD777]

@Senthiuz The Roth is tax-free for your heirs

[@Johnrl21]

Both are high enough priorities that which one we do first is not that relevant. Both are happening and that is table stakes.

[@GoldbergDaBoss]

This is the best HSA video I have seen on the internet! Thanks for going into so much detail.

[@JarradMorrow]

Appreciate the feedback. Happy to hear it helped.

[@TrumptasticDays]

@@JarradMorrowsince you didn’t have a HDHP in 2024. Can you still use your 2k medical bill as a HSA medical expense?

[@JarradMorrow]

@TrumptasticDays great question. Yes, you can withdraw from your HSA without being actively enrolled in an HDHP. You only have to be enrolled in an HDHP to contribute to an HSA.

[@briand.1694]

For Sure! He made a video a few years ago that got me into an HSA at my job.

[@chrishayes4166]

It is annual enrollment season so nicely timed on this one. At my employer the per pay check premium on the High deductible plan is so ridiculously low compared to the "low deductible" plan premium, the Deductible/Out of pocket max are at the IRS minimums and they fund a significant chunk of the HSA themselves as well. Its such a steal of a deal, even if/when I have any unexpected medical. Every company/plan can be different of course, but it's such an insane deal for my situation I can't help but appreciate it.

[@ericolens3]

i like the fact that the money i spend on health insurance is actually being used on myself. and technically if i did have a real emergency, the higher deductible would hurt but from my experience, 90% of the time my money is being used on myself NOT the insurance company. rather than the ominous "but what if" fear tactic that while sound to an extent. i actually pay 1) monthy premiums 2) a copay 3) having to clear the deductible anyways so im being hit 3 times for every medical visit and for a MY PERSONAL SITUATION. i only need basic medical stuff, just routine check ups. like twice yearly cleanings (dental), annual eye appointment (optical), annual check up, and the odd ball doctor visit just to provide my job with a doctors excuse when its merely an OTC illness. so yeah for me i HATE the traditional health care plans. im paying them monthly then having to pay again for the doctors visit, and then having all of it still sent back to me to still pay. So I'd rather suck it up for one year (worst case scenario) to build up a funded HSA. but in actuality my first year of having an HSA was PROFITABLE. while i didnt saving like crazy to invest. i was able to pay my doctor's visits off, and whats more is what can be covered under HSA, so for next year I increased my contributions so that I both save more and spend more. 1) getting both glasses AND contacts 2) braces for my slightly crooked smile (dang wisdom teeth) 3) saving/invest the excess so that when im older i can not worry as much about health care issues and technically if i wanted to, i could revert to the low deductible plan in my old age and the previously saved dollars are still mine. while is NOT a good idea, it might be if i sick and feeble. i doubt it.... cuz technically my HSA can fund itself if my intrest accured is more than the monthly costs... I'll ask that question once i get older. i had to help my mom do her open enrollment so i kinda see what retired Healthcare monthlies entail. you gotta PAY even once retired to stay covered, apparently even in retirement. all in all, HSAs are awesome. im not a female but it does cover hygiene products so thats a cool thing if I have a daughter. i can technically reimburse myself for that transaction. 😉

[@kevinschultz6091]

@@ericolens3 - just for myself, it's a slightly different situation: 1. Dental and vision are separate from the HSA, so I get those irrespective of the main health care option. 2. I've been investing in my HSA for the last 4 years, but I've got some moderate doctor's appointments scheduled for 2025 that the high-deductable plan would potentially be very pricey for. 3. The difference between the high-deductible and low-deductible plans isn't just in the deductible (at least for my options): the total percentage paid is less (80% vs. 90%), and there are a few other fees involved as well. 4. My low-deductable plan also has super-low/no co-pay for most things, so I get to avoid that issue as well. That being said, yeah - I've had my HSA for 4 years now, and have gotten 12k into it. But the moment I need anything resembling surgery done (a follow-up colonoscopy, for me), I'm switching back to the traditional one.

[@bernadettesandoval3990]

If you have your family on your plan you can contribute more each year. The best benefit as a retired medicare enrollee; my husband and I save well over $200 MONTHLY because we can use a high deductible medicare supplement plan (K) without worrying about the higher Max Out of Pocket since we have enough to cover many years of MOOP, if necessary! We invest our savings and if we never use those funds, our kids will have access to those funds...

[@zackwheat5770]

I stated an HSA when they were first available. After investing, it had grown to $130k. During Covid, I reimbursed myself for about 20 years of expenses. I had saved every receipt. Now, I still have about $50k in my HSA and pay my Medicare premiums out of the account.

[@geraldf.1222]

Didn't know you can pay Medicare Premiums out of HSA.

[@carak4356]

Haven’t watched yet but wanted to say thanks for putting this out right before open season. Much appreciated 😊

[@0_0merry]

The fact you can use it for your dependants is great!

[@foobird02]

My employer will contribute $2640 this next year. Back 7 years ago, I got cancer at 33 and was able to pay for the necessary surgeries and treatments via that HSA account. Nothing out of my normal accounts, retirement, or anything like that. Great account.

[@brandonwilson5727]

I invest into a HSA, my employer also contributes $25 per paycheck into it ($650/yr) so that’s nice. I did pull out around $5K when my son was born which I kind of regret, but I just didn’t have the money at the time. I currently have $9,000 in it and I’m 24 years old.

[@sauvensfleurinord9084]

I am also 24 and have been investing into mine for 2 years now; I just got married and my wife goes to the doctor A LOT and is in therapy; she doesn’t have her own insurance so I had to add her on mine. I have been advised to do the ppo plan from now on but that means no more hsa unfortunately; what are your thoughts?

[@JimstrVids]

@@sauvensfleurinord9084 an HSA (Health Savings Account) is generally not a good idea if you go to the doctor frequently, as it is designed for people with relatively low healthcare needs due to the high deductible associated with a qualifying health plan; if you need regular medical care, you might end up paying more out-of-pocket with an HSA than a traditional health plan with lower deductibles.

[@litapd311]

no need to regret, money is meant to be used and making life easier with a newborn is a great use. you're still young and have plenty of time to build it back up

[@kevinschultz6091]

@@sauvensfleurinord9084 - if you're actually going to be using your health insurance on a regular basis throughout the year, then you should go with traditional insurance. (Unless the doctor's appointments are all just $50 co-pays, or something like that.) An HSA is a valid investment option only if you AREN'T using it more than 1-2 times a year for inexpensive check-ups. At least on my plan, the difference between the health plan I have to get in order to have an HSA (ie, the high deductible plan) is just in all ways worse than the low-deductible plan. (ie, in addition to the deduction requirement, the max out-of-pocket was more, and the percentage covered by the plan was less.) Just anecdotally, I've had an HSA for 4 or so years now, and I've got 12k into mine...but I'm switching back to a PPO for next year, as I've got a follow-up colonoscopy scheduled. (The last one I had 3 years ago had enough pollups that they want to check again.) That in and of itself would be covered (mostly), but I've got potential follow-up appointments as a consequence, and THOSE might get pricey. Assuming everything goes well I'll swap back to the HSA for 2026, but for 2025 it'll be a regular plan.

[@anthonylosego]

And in just a few years, you too can $270,000 in your HSA.

[@tom4u2c]

Excellent advice. I started investing in my fidelity hsa and it’s been great.

[@MechE11B]

I have no idea why your videos are not coming up when I'm subscribed to the channel.

[@JarradMorrow]

This is a common problem us creators hear about from subscribers. KZbin doesn't always show our videos to you on the home page so you have to manually tap/click on your subscriptions to see when new videos are released.

[@MatthewStidham]

One piece people leave out with health insurance is the higher the deductible, the lower the premium, ceterus paribus. That additional money spent on premiums can often be greater than the amount you are saving on your deductible. Consult a financial advisor with a fiduciary, and ask them to show you the math when buying any insurance plan.

[@kevinschultz6091]

Note that high-deductable plans may also have other cost-cutting measures, such as "total percentage paid" - for example, my high-deductable plan pays 80% of major surgeries, whereas my low-deductable one pays 90%. with that in mind - yeah, I've had an HSA for the past 4 years, but I'm switching over to a regular one for 2025, due to some scheduled appointments (follow-up colonoscopy.) I'd much rather have the low-deductable option when I'm facing down the potential (fingers crossed) of more surguries.

[@Mazlem]

I started my HSA after seeing a video on medical expenses in retirement and immediately set it to invest the money, only keeping $1000 cash in the account.

[@tt-designs124]

After savings, maxing out my HSA is my top priority. I don’t spend from it though and instead pay out of pocket for any expenses and keep receipts. I also recently went to a doctor in Mexico and have read that those visits also qualify.

[@serious_as_a_heart_attack]

Jarrad, Excellent video! I only see one possible scenario missing: If you happen to be in a situation where you itemize on your taxes AND deduct medical expenses then reimbursing yourself later could be considered double dipping. Certainly I think the IRS would want to disallow the deduction if you reimbursed yourself within 3 years of the tax due date and probably ever. If you reimburse yourself 10 or 30 years later it might be difficult for them to challenge but they still could. Again this would only matter if you used the same expenses as an itemized medical deduction that you reimbursed yourself for later tax free from the HSA.

[@DoctorShaunB]

Wouldn't you be able to simply document that you deducted taxes during the itemized year, and Layer reimburse yourself for the pre-tax only subtotal cost of the medical device/service? That wouldn't double dipping as I understand it.

[@beb10]

Thank for the good video. Let me add some key points. So when you die, any HSA money left to a non-spouse will be taxed in its entire amount to that beneficiary. Kind of kills the tax free withdrawal portion in a huge way. So I take out eligible all health expenses per year from my HSA and then invest that money into Roth IRA or Roth 401K savings in the exact same funds. Yes, I invest all 100% of the maximum amount in an SP500 account and been doing this since 2015. This way I, my spiuse, or my children ever gets taxed, I file my health care receipts for each year with my taxes, takes burden away from trying to process all these receipts in a future year, and then can use Roth IRA money in the future for anything including non-healthcare items.

[@Macarthurmaintenance]

Can you expound on “I file health care receipts each year with my taxes”? I know we use form 8889 to report our HSA contributions and withdrawals, but withdrawals are always $0 because I’m holding onto the receipts for 20 years from now (just like you). Are you saying you literally just attach random receipts to your tax packet when you submit it? I’ve never heard of this. Hoping you can provide details on how and why you do this. And does this mean you no longer have to save your receipts?

[@jenn22588]

I really wanted to do a high deductible plan next year for the reasons you mentioned but I just can't afford it. With a PPO, I never use much of the deductible because most things are copay or 10% co-insurance. I'm still recovering from a high deductible plan a few years ago, everything counted towards the deductible and my family had some hospital bills. Since I don't know what's going to happen, I didn't want to risk it.

[@jahmeykan]

Jared, thanks for doing the research and providing helpful content. It's always appreciated.

[@JarradMorrow]

My pleasure!

[@MistyPursel]

Thank you for this great video! It's the best I've seen on HSAs and I appreciate all the helpful info you included.

[@jackiepaesthetics]

You can contribute to any hsa regardless of your employers choice. You are only subject to max contribution limits combined

[@amywalz5987]

Good video. I switched to a HDHP several years ago through my employer, specifically so I could have an HSA. I pay for everything out of pocket and invest. My employer uses HSA Bank so I manually transfer to Fidelity. I appreciate all the info, but please consider sharing some shorter time frames as some of us won't have a 30 year on ramp. It would be helpful if you could share what the HSA would look like with only 15 years , as there is still a benefit. Also if you could share how you calculate the 7% average times amount times 30 years...I think I know, but am not sure. I will check out your other videos.

[@JarradMorrow]

Appreciate the feedback. Calculated the return based on a compound interest calculator. Here's an example of one if you want to input your numbers with a 15 year time horizon: www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator

[@kennethprola5136]

A=P(1.07)^t A is amount you will have P is principle, amount you’re starting with 1.07 is the multiplier for a 7% increase t is time, the number of years ✌️

[@silvahawk]

19:00 so you're saying I don't touch the HSA account, and pay out of my pocket (save that receipt) so that the money is continuing to be invested, then, when I actually want to take out the money from my HSA, i can use those receipts from ages ago and be able to withdraw that same amount tax free?

[@JarradMorrow]

Correct

[@mylesgray3470]

I’ve hear about this idea ages ago but saving a mountain receipts for decades seemed risky to me.. but as a fallback if you loose track of them, you can simply use the HSA on your personal medical expenses when you get old. So far I have been spending my HSA dollars every year figuring it’s just a tax advantage and nothing more, but I really should keep growing it.

[@slagellajs]

@@JarradMorrowIs there a time limit on that or can it be anytime in the future?

[@josephinelore4852]

Yes!! You are so appreciated. Thank you!

[@RegineBrady]

Thank you so much for your video. You’re one of my favorite financial KZbinrs and I’ve been waiting for your next video . I have a couple of questions about the hsa and the Roth IRA: 1- what are the best funds to put in the hsa? The high dividend ones or the high growth ones? 2- since Roth IRAs don’t have tax penalties when you take the distributions at 59.5, what’s the best things to invest for that one? The high growth dividend ones or the high income dividends ones or the etf’s? Since bring the hsa and the Roth are both tax deferred wouldn’t it be an absolute no brainer and you’d be an idiot not to do the obvious, but invest in solely the highest income dividend ones (I guess that’s the one with the high profit- where’d you’d be charged a capital gains tax, rather than the high growth dividend (in which you’d have to pay a tax on the dividend). 3- are the ETFs with high dividend better than those with high yield, or maybe … what am I trying to learn here??? I’ve heard this talked about in other people’s videos and still don’t get advantages and disadvantages and when it’d be wiser to make say, the high yield investment in the Roth high yield, but maybe own more more growth focused ETFs in a brokerage account, because lower dividends thus lower taxes to have to pay on any dividends received. Am I making any sense with these questions? I only started learning all this stuff recently, so I wish I was not so late in the game- I’m a millennial 😂- I know you talk about us millennials, hehe.. 😅😂 but some of this stuff really goes over my head. (Im blonde heheheh) 😂 Thanks again sooo much Jared!!! Regine

[@antilogism]

Another cool thing about contribution to an HSA is that it doesn't increase the Modified Adjusted Gross Income like contributing to an IRA does. MAGI sets the limit of the IRA contribution when one also has a 401K. That means it may be good to fully fund the HSA, lowering the MAGI, since that sets the IRA contribution limit.

[@bribradt3450]

Wish I knew about HSA's sooner. I've been buying my health coverage straight from BCBS for a few years (outside of employer, not through marketplace) I opened an HSA through fidelity earlier this year with the intent of only using it for retirement. It's exciting to think about the growth potential plus tax benefits.

[@George-hl2xm]

Why wouldn’t you use the market place you can use a hsa with the market place 🤔🙄

[@bribradt3450]

@George-hl2xm I was going to go marketplace. When it came to choosing a plan it was would have been 400-500 for a 10k deductible. Buying a plan straight from the insurance company I got a 3000 deductible (still HSA eligible) for $120 a month

[@albert109]

I do what you call supercharging, with the caveat that I spend from the account all year like a 0% loan, then put all the money back. Gives me extra cushion through lean times, but I still treat the account like a retirement account.

[@amuseinthecraftroom6257]

Timely! Just rerired early and i was shopping for the best place to roll my old Optum and Health Equity accounts. Im all about the lowest fee.

[@williewonka6694]

Interesting, Had no idea it might be possible to roll over an old employers Health Equity account. I'll look into that.

[@amuseinthecraftroom6257]

@williewonka6694 if it's an HSA yes but the FSA no.

[@BOOMBurton]

My wife and I are in our late 50s with elderly parents where 2 of them having to live in a skilled nursing facility we obviously got concerned. We looked into long term care insurance and HSAs at the same time and did some comparisons. We determined that the HSAs were the way to go as it would enable one of us (probably her) to live in an assisted care facility using our own HSA funds. Now, we have been contributing and plan on doing so until 65 which has time to grow. Our plan is to NOT be a burden on our children. In the ol USA it’s sad that our system is designed to break the average American through “health care”

[@scottwilly86]

I was curious if an HSA would cover assisted living. I likely won't have any kids and will be alone in old age I was trying to consider options in case life throws me a curveball. I was getting a lot of mixed answers when I Googled the question.

[@rshearer2]

do you contribute the 1000 catch-up for your wife ... so in 2024 you could contribute 10,300 for the year? --- I just found out in 2023 that catch-up is an individual catch-up amount not the family catch up -- so you can contribute 8300 for your family ... 1000 for your catch up and 1000 for your wife's catch up (assuming she is under your HDHP) ...

[@vickig6080]

Thank you for this video with explanations of the HSA that I can understand and follow easily. I just enrolled in my first one at 57 so I will try to maximize investing in this until I retire.

[@MarieWentworth-p2h]

HSAs are such powerful tools, especially as you get closer to retirement. I was in a similar position a while back, and working with a financial advisor really helped me maximize my HSA benefits. Zoe Ann Wiest guided me on how to invest within my HSA, and it’s been such a game- changer. i am around half a million up Just search her name on Google if you’re interested in getting a plan in place-you’ll be amazed at what it can do for your retirement!"

[@serious_as_a_heart_attack]

​@@MarieWentworth-p2hThis is a scammer thread I would never use anyone recommended in this disingenuous way.

[@justmyopinion4now]

It's ridiculous that you have to have a high deductible plan to participate in this ... Most of us will have medical costs at some point in our future, especially once we go to medicare! They need to let let all of us participate! Especially with the cost of medical insurance, co pays, co insurance, deductibles, etc!! Maybe in the future?

[@mark.harvey]

For most people HDHP, especially when younger, is cheaper per year. So it's not bad to have a HDHP. Take what you would spend on higher premiums and save it for your deductible. Do this early and you'll even earn a bit every subsequent year.

[@darrencredeur4415]

The savings on the monthly insurance premium will almost pay for the higher deductible plan. Also you take the monthly premium savings and put those funds into an HSA account you will save your tax rate on that money as well. This will basically make the HSA the same or cheaper than a so call LOW deductible plan.

[@jonathangick8028]

I work for the City of Indianapolis. Lively waived the amount of money i have to hold back. therefore, 100% of my HSA money is invested at Schwab.

[@MrJeffgonz]

I love the HSA. The biggest downside is when you're gone and you have a beneficiary that's not your spouse, like your children. They would be required to take full distribution from the account and it would be taxable income to them.

[@richardpetty9159]

As should be the case, unless they roll into a similar account of their own. That’s probably not an option but that’s how it should be.

[@riftwalk2546]

i think the best advice is to open 2 HSA (yes you can open as many account as long as you dont go over the limit) one for paying bills right away and the other one for investing. because its too much work keeping track of everything in a spreadsheet. other than that everything was amazing advice

[@theclown888]

False

[@annieva264]

He didnt mention the Limited Purpose FSA (LPFSA). I have an HSA and also a LPFSA. The LPFSA can be used for dental or vision but it must be used every year like an FSA. I can roll over $600 only. Essentially i get a 25% discount on dental and vision.

[@aliciafaulkner416]

Unless your dental plan sucks, I don't see the need to have LPFSA. My plan has $50 deductible and I pay 10% and total benefit amount is 1000. So in most years, I pay $50-80 total on dental. Not worth the effort to create LPFSA for that $80 which saves like $20 tax.

[@williewonka6694]

Long time Fidelity and Vanguard investor. Fidelity is the best company I've ever dealt with. HSA is seamlessly part of the low cost, high return Fidelity portfolio.

[@briand.1694]

Not sure if you mentioned it in the video or not (as I was kind of skipping through the parts I was already familiar with) but you can not pay Medicare directly with an HSA. Otherwise, it's a great retirement tool.

[@rshearer2]

that is news to me ... will have to investigate it -- that was my plan .. ie: who cares about medicare --- will pay for it out of HSA ... interesting ... and kinda stupid ... but that is govmt .. so .

[@Nordic_Sky]

I had a high deductible plan for many years and built up a healthy balance in my HSA. But I switched to a regular HMO this year because I started to have health issues, and the $3500 deductible was annoying compared with a $35 co-pay for an MD visit.

[@kimsnader8777]

I believe paying COBRA health insurance premiums are also qualified expenses, but would like confirmation of that. I'm the document-and-reimburse-later type, especially during this current bull market. You can also make an HSA contribution, as long as you are enrolled in an HDHP, even if you do not have earned income. I learned this when I was laid off at 61, and my income sources shifted to unemployment compensation, SS survivor benefits, survivor pension payments, and my investments.

[@TheMule1]

HSA unlike IRAs or 401k you save on SS and Medcare tax. You can save $300 extra from this difference if you max ot out.

[@logicalmisery3737]

I opened a Fidelity HSA which I plan to fund with a 60 day rollover from the company's chosen HSA servicer (distribution check, deposit to personal checking, then fund Fidelity HSA). My question is- if I'm depositing money to Fidelity HSA from my personal checking account, does that mean I don't actually need to wait for the distribution from the other HSA to complete? Does Fidelity just mark it as a rollover contribution because I said so or do they do anything to verify the money actually came from another HSA? I will max my company HSA by the end of the month, and I feel like I can get funds into Fidelity HSA now with personal money ahead of the distribution, and not seeing any rules preventing that.

[@389293912]

Dude!!! I have the Fidelity HSA! Nice. I have the funds invested and they don't charge any fees for the account or for stock trades. This is a big problem with having government involved with healthcare: it normally subscribes to out-dated treatments and medical philosophies. If you get cured by some Chinese herb, sorry, no reimbursement, even though it's your money spent on your body.

[@adakot123]

Awesome analysis. Thank you!

[@JarradMorrow]

Much appreciated!

[@bobaboey]

HSA is a triple tax advantage Medical IRA. Its a no brainer to have one especially when ur young! Ive been in one for 15 yrs, maxed contributions every year and vested in the stock market. Ill never worry about a medical bill now that im 50. Guaranteed

[@bryanwakefield5123]

Optum user here 🙁. $1000 min balance to invest and monthly invest fee of 0.03% of avg daily balance not to exceed $10.

[@bgoode652]

My former company used Optum and I was not a fan. I opened an HSA with Fidelity and requested a balance transfer at least twice a year to ensure my Optum account never had much of my money in it. I had to leave it open to get the payroll deduction benefit. Assuming there is not transfer fee (I didn't have one), it was a no brainer for me. The transfer can be initiated through Fidelity and you don't need to do anything else. I invested how I wanted with Fidelity and told Optum to kick rocks when I quit that job.

[@JarradMorrow]

Ouch. Yea, that's not ideal. I've been in the same type of situation in the past with a previous employer. When you leave that job just make sure to get that whole HSA transferred over to Fidelity ASAP.

[@pedroasencio3290]

If you get the fidelity credit card 2% cash back, you can use that as your payment method for healthcare and then pay yourself back for your expenses and get an additional 2% back

[@darrencredeur4415]

Optum is terrible....just do payroll deductions if available and required to go into Optum then transfer funds to a FIDELITY HSA account-reason is because if you add money to HSA via payroll deductions, you save and extra 6ish % on FICA. Fidelity is by far the best HSA account.

[@rshearer2]

Also Optum .... 2000 min balance ... :( ... I invest through Betterment w/Optum ... and I exceed 10$ ... last monthly fee was over 25$ ... for NOTHING ... I hear we can transfer from one HSA to another .. once every 12 months ... might do that in next few weeks ... Betterment doesn't have a cash balance .. everything has to be invested and THEY pick which shares they will sell to pay their fee from... I would rather them NOT sell what I bought -- and had a cash balance I could sit in for a bit if I wanted to -- or could leave for the fees ... I am NOT happy with my company's negotiating skill for HSA features

[@gbohol]

Where do you open an HSA account? We only have FSA at work with our benefits.

[@trentbarkdull6818]

Very helpful, thanks for the video.

[@JarradMorrow]

You're welcome!

[@mylocast]

Jarrad, I found your video interesting and the idea of deferring reimbursement expenses to the future by keeping payment history and submitting HSA withdrawls in the future (30 years - 19 mins in video). I was thinking about this and one additional item of note could be considered. Paying yourself 2054 dollars for a 2024 expense incurs the issue of the deflation value of money. Any funds you withdraw in the future will be worth less then today's value of the dollar assuming inflation over the 30 year time frame. Thus, any growth in your HSA assets must exceed inflation rates to be better off being paid down the road vs in today's dollars. This is where the brokerage investment model works, as the savings account HSAs typically will not pay more then inflation in an interest rate. Also, thanks for the heads up on Fidelity. I'm currently with Lively - Schwab brokerage. However, any future HSA accounts will likely be with Fidelity due to fees.

[@paulwilbanks6885]

If you are active duty military and on Tricare can I open an HSA and take advantage of the benefits for retirement?

[@albert109]

I’ve had an HSA for 7 years, but this year is the first one I chose not to because only 1 pricy plan on marketplace was HSA eligible (even though the one I chose feels like it should be, given its deductible. It’s a shame, but I’ll just put the $ I’d have put in the HSA elsewhere like 401(k).

[@anniealexander9616]

My coworker buys gas and beer with his HSA card. 😂

[@JarradMorrow]

🤣 what an idiot. I know a guy who spent some of his HSA money on candy and they caught him.

[@richardpetty9159]

Mouthporn.

[@annieva264]

😂 that will be hilarious when the IRS catches him and starts charging him fees...or he will have to pay back taxes on the amount spent in non medical items.

[@Apophlegmatis]

My most recent HSA did not roll over more than a certain amount,I believe it was 2000/yr, doubled for covid to 4000

[@NicholasJonesCPA]

Fidelity HSA is amazing.

[@timtardiff1929]

Please tell me how putting money into an HSA and spending out of pocket is any different than putting that same money into a 401k.

[@pchygrl17]

Very informative, thanks!!

[@JarradMorrow]

Glad it was helpful!

[@richardpetty9159]

I’d like to throw one little light beam of reality onto this situation: Whatever you *think* you are going to spend on medical expenses when you are retired, double, triple, or quadruple the amount. If you think about this, you’ll know that I’m right. The number of people who are able to save “a ton of money” in an HSA and not eventually spend it all on healthcare-related expenses is pretty darned small.

[@gwheelock911]

Keep in mind that in the event you need to file bankruptcy, your HSA is completely unprotected, unlike a 401k or IRA.

[@bgoode652]

In all fairness, if you paid the $2K medical bill from the HSA and just invested the $2K you used to pay the bill into a brokerage account you would still get to $13K using your 30 year calculation. The only difference would be that you would have to pay the tax on the gain (unless planned for the 0% LT capital gain bracket) which is obviously not optimal. Of course, human behavoir usually gets in the way but it's worth noting the "opportunity" cost. That being said, I'm doing the same thing you are doing for larger medical expenses. I'm keeping those receipts electronically.

[@derkong7114]

you should do both. Max out all tax savings accounts.....

[@stocksxbondage]

But the brokerage acct was built on after tax dollars. HSA contributions are pretax dollars making medical expense reimbursements 100% tax free. Completely unheard of! If you’re a living breathing human being and expect to pay for medical expenses, you might as well pay for it tax free.

[@bgoode652]

@@stocksxbondage The Bill was paid with after tax dollars. What you're saying has nothing to do with my point.

[@bgoode652]

@@derkong7114 Of course. That doesn't address the point I'm making.

[@stocksxbondage]

@@bgoode652 I’m not understanding your point then. Why pay with tax free HSA money today and invest the difference in a brokerage to pay the additional LT cap gains? Taxable brokerage is double taxed as both ordinary income (contributions) and LT cap gains. HSA is only taxed once as ordinary income, then the bonus of completely tax free withdrawals with medical expenses. Why not invest with tax deferred dollars, pull from it tax free whenever you want, then only pay ordinary income tax never cap gains?

[@derbywinner6316]

I has been maximizing to my HSA . I pay my medical expenses out of my pocket.

[@Apophlegmatis]

FICA isn't a tax anyway - it's just a mandated retirement plan. Probably not as good returns as you can get if you're able to maximize an HSA, but not a tax.

[@OneNvrKnoz]

In your example of spending $2k out of pocket, if you used an FSA instead, can you then reimburse yourself decades later through your HSA?

[@FastEddieSRT]

If my employer has an account can I still open a 2nd HSA attached to the sake health plan so I can get my employer match and I can have a better account with better investment choices?

[@JarradMorrow]

Great question. I've never tried that but you'll have to get your employer to agree to deposit your HSA contributions into that 2nd HSA provider you want to use. The only workaround I've found for this is doing manual transfers from employer sponsored HSA provider into a second HSA provider every time you get paid or every month/few months. One thing I learned the hard way is that they'll usually make you keep a minimum cash balance in the employer sponsored HSA. If it falls below that amount (threshold will be different from provider to provider) then they'll close your account. Which obviously isn't good because then your employer won't have anywhere to put your HSA contributions. Also watch out for fees you may be charged for doing regular transfers. Some providers will charge you every time you transfer money to a different provider (even if the account stays opened).

[@painpour1]

Fidelity HSA is at 4.3% interest

[@ryans7097]

Just found your video/channel.. Who do you recommend talking to discuss if I should be in an HSA plan? I have a pre-existing condition so I am not sure if it's worth it for me to try to enroll in one.

[@deemon710]

Wait wait. Are you saying that in 30 years I can withdraw from the HSA an amount I used for a medical experience this year?? Withdrawals from the HSA don't have to be on the same calendar year?

[@JarradMorrow]

Technically the IRS said it so I'm just communicating the guideline around their rule. Here's their exact stance on it: kzbin.info/www/bejne/eXmqZZakqMSBqM0si=6LDVv0NvMbBNEjKb&t=823

[@norahramz]

I would love a deep dive of HSAs in NJ. And if it’s still even worth maxing it out to benefit from the federal tax savings (even though we would still have to pay state tax). Also, suggestions on what investments to have in my HSA that are tax efficient or tax exempt in NJ.

[@diytwoincollege7079]

If you die before you spend your HSA money, what happens to it? Can someone inherit that money?

[@RA-fm8wr]

We max the family HSA contribution out every year and place it unto Lively thru Schwab all in the market and only spend dividends when needed. Minor items like band-aids we bank to get reimbursed after 65. And the total will pay Medicare premiums after and other medical bills later in life. I will never allow it to get above 150k since its regressive for children to inherent more with tax consequences

[@jenniferbmendezful]

HSA Bank makes you first accumulate 1k, but then all can be used for investments.

[@terrystanwicks2665]

I'd be curious to your thoughts on using HSA funds for COBRA health insurance premiums for as long as one is eligible for COBRA and/or until someone is eligible for Medicare. Note, fully aware that HSA funds cannot be used to pay health insurance premiums other than COBRA premiums.

[@juliep7181]

I totally understand what FSAs and HSAs are. I hve both options available to me finally BUT I'm 64 & 1/2 years old. I have SOME $$ saved for retirement, not a lot. Which option (FSA/HSA) is best for me now?

[@serious_as_a_heart_attack]

Why would you want a FSA that you have to spend at the end of every year if you can save it indefinitely? Only possible benefit for a FSA would be if your employer only matches or contributes to a FSA then you might want to do a conservative amount to it to get some free money from them as long as you will use it all otherwise the HSA is probably better by far. P.S.: You can't contribute to a HSA once you are on Medicare so if you want to put some into one you might need to do so soon. Your contribution limit will likely be prorated the year you start Medicare, so if you start it July 1 your limit may be cut in half, for example. You could still have a FSA contribution then as far as I know but still use it or lose it.

[@josetrujillo2277]

I have Optum used by my employer. If i transfer to Fidelity HSA, do I need ro own stock to invest? Thanks.

[@pvd68]

Probably as most funds are tied to the company they provide them through. But Fidelity has great funds. I did this a year ago and am very happy. Also when you transfer to Fidelity as a stand alone HSA (not tied to an insurance plan) you don’t have to keep the $1000 cash balance…

[@deejawhitegrass]

Were you able to make a transfer? How was the process? How much were you able to transfer? Sorry if I seem nosy, My employer also uses optum. And I’ll be able to start contributing next month.

[@pnvst6648]

Great video, and kind of shocking to learn only ~3 million accounts are actually investing their HSA money. We've been contributing to an HSA since 2016 and started investing in 2019, without taking out distributions. We're close to 40k of investments currently, and hope this account will one day pay all of our premiums and out-of-pocket expenses while still growing due to compound interest. I like you're idea of storing receipts in the cloud, although I'm not too concerned to reimburse ourselves since there are enough HSA eligible items to spend this money on.

[@JarradMorrow]

I don't think it's very obvious to most people that they can invest HSA money and how to maximize the account. Education is the only way to get the word out which is why I'm always trying to do my part by spreading awareness whenever I can.

[@Rastebb]

Lively doesnt force you to hold cash and just sweeps cash to a fidelity hsa account when you want to invest. What reasons do you not like it?

[@bobaboey]

HSA is good for medical, dental, vision, hearing, over the counter things, premiums, out of network or not covered expenses.

[@manuellozano4914]

What about medical expenses made out of USA ?

[@jimk59]

I have my self directed HSA at Fidelity, no fees and I can invest it in anything they offer. A reminder that you do not need income to qualify for an HSA.

[@richardpetty9159]

Yep, I’m being charged $3/mo by my institution. Waste of money.

[@shadmanigat2232]

I have some question about my HSA my HSA balance is coming to my fidelity account Pretax , its almost bigger than my 401k this year my question is : after i spend my own after tax money to medical bill save the receipt for later , meanwhile i invest the HSA money in securities like index fund and more , 1- WHERE TO CLAIM THE MONEY WITH THE MEDICAL BILL RECEIPTS I HAVE SAVED ??? 2- SO THE HSA MONEY COME FROM PRETAXT MONEY WICH MEAN MONEY I WOULD PAY TAX WITH RIGHT ??? SO THE IRS GOING TO ASK ME FOR MORE TAX MONEY ??? I OW 1K ALREADY

[@carwashesandotherfunvideos]

Your hsa videos are so helpful. I learned how to tighten up the plan even more with this video. ThNk your. Quick question, do you have to prove you are enrolled in a high deductible plan each year or no?

[@JarradMorrow]

Appreciate the feedback 👍🏻. Technically you don't have to prove you're enrolled in an HDHP if the provider doesn't ask. But if you get audited by the IRS and can't show proof that you were enrolled at the time of contributing then that's a problem. On a random side note- It's always odd to me how some of this HSA stuff seems to be done on the honor system (being on an HDHP & withdrawing for approved medical expenses) from the IRS's perspective. If someone gets lucky and doesn't get audited then they could technically game the system (FYI I'm NOT endorsing this behavior). I'm sure there are some thresholds on the IRS side that throw up red flags, but I have no idea what they are.

[@carwashesandotherfunvideos]

@@JarradMorrow Thank you so much for responding. I agree that there is a lot of honor system assumptions. I guess thats why I asked because it seems odd that you dont have to document. Maybe these accounts are used so sparingly that they make assumptions about the people utilizing these accounts and dont think they will use them in a nefarious way. Thanks again. Huge appreciation.

[@GusMahn]

Is there any coordination of benefits with HSA's. I have an work provided Retiree Reimbursement Account which says I must exhaust any HSA before they will reimburse. My wife has a work funded HSA. How does that effect the use of my RRA for me as an individual and us as a married couple?

[@KatieLibby1315]

My max out of pocket is $2,800 with my HDG. Even with inflation wouldn't I have to live more than 50 years and have catastrophic claims every year to hit $165,000?

[@biamayz27]

Can I participate if im in my spouse’s insurance plan and I elect high deductible with my employer?

[@bruhcsp]

Insurance in the US is a big scam! This is the only place in the world where you pay tons of money for an insurance and finally when you need to use it, boom!! More debt!

[@profhaub]

I wish we could choose insurance OR HSA during enrollment. During our "healthy" years, we can build the account and invest it -- includes employer match/contribution. Same thing for Social Security, we should be able to choose where that goes. I like health and Soc Sec are taken out -- however, it would be best to be the decision maker of our $$. Social Sec could be double what gov't allows us to take. In essence, why not just convert the Soc Sec into a Roth?

[@chaseosborne9458]

If transfer the HSA to a brand new HSA can i still get reimbursed for purchases made while I had the old one open but not my current one?

[@rwcoulson]

Thanks Jarrad! :) 👍

[@JarradMorrow]

Sure thing!

[@DrogoBaggins987]

Just started an HSA with my new job. It's with HSA bank. Will I be able to start a Fidelity HSA and transfer to it every month from the HSA bank account?

[@JarradMorrow]

Yes you can do transfers from HSA Bank to a Fidelity HSA while you still work for that employer.

[@DrogoBaggins987]

@JarradMorrow Cool. Thank you.

[@CJ-Photo]

Can't we have. Fidelity HSA open at the same time as our employer HSA as long as we don't go over the contribution amount in total?

[@AnthonyTilleyVideography]

Can I pay my 2024 monthly medical bills in october, november, and december in 2025 and it count toward my 2025 deductible instead of my 2024 deductible?

[@astrahl]

My company only offers a ppo or an Hsa option. I want to keep my ppo but can I also get an Hsa outside of my job?

[@JarradMorrow]

You must be enrolled in a high deductible health plan to be able to contribute to an HSA

[@tachikaze222]

HSABank just got even worse so I moved my $$$ to Fidelity LOL

[@lorenabell4713]

I asked this in an older video but I will ask again here. I am pretty new to all this and am kind of confused on how you reinvest the money that's going into the health savings account. Do you put the money tax-free into the account from your paycheck for example, and then take the money out of the account and purchase other investments? I'm confused on how you reinvest money you put into an HSA. Also, wouldn't an investment purchase be considered a non medical expence and activate the penalty charge you mentioned?

[@serious_as_a_heart_attack]

If you follow the video he mentions a 'self directed' HSA with Fidelity (many different companies might offer HSA accounts but some don't allow investing it or require minimum amounts in cash deposits and/or don't have 'self directed' accounts (i.e. they want to charge you advisory fees to manage it for you)). So to get to your question you open your account then the investments are made within the account so buying stock, ETFs, etc. are not withdrawals as it is still within the account (do not withdraw the money to 'reinvest' elsewhere). If your money is not where you want it then speak to the company where you do want it about rolling it over to them. Very important is to have them do it directly (don't have them send you a check to redeposit). If the IRS treats it like an IRA you are only allowed one self directed rollover per year: any after the first may be considered withdrawals even if you rolled them over. Also keep track of the dates the money was taken out of the first account and put into the second whether you handled it or not the IRS has rules it must be finished within certain time limits like 60 days and needs to be completed within the same year or its a withdrawal subject to tax and penalties. Having them do it directly is considered a trustee to trustee rollover and there is no limit on them as long as all other requirements are met. There may be restrictions on what you can invest into as well, but they aren't probably things you would want to invest in anyway (like artwork). Just remember any withdrawals later not spent on qualifying expenses are ordinary income, there is no long term gains rate, etc. If your employer has their HSA with Fidelity you can probably call them or do it online. If your employer does it directly you get a triple net tax savings off of income, Medicare, and social security taxes. You can also just write them a check or send them post tax money for your contribution just be sure to deduct it as an HSA contribution on your tax return (gives you an income tax deduction but you still paid Medicare and social security taxes on it). Hope this helps.

[@evcass69]

Can you move rollover FSA balance into an HSA? What happens to remaining HSA funds upon death?

[@nataliadelmoral]

I’m having trouble on how to explain to the IRS the part that I “reimbursed myself for medical expenses”

[@JarradMorrow]

You don't have to explain anything to them because they made the rules so they understand what it means.

[@serious_as_a_heart_attack]

You will have form 8889 on your tax return for an hsa...when you take any distribution from your HSA you will get a form 1099-SA from the administrator for your tax return the next year (usually you have to get them online) showing the amount and nature of the distribution. On form 8889 you just enter your reimbursement amount to indicate that amount was spent on qualifying unreimbursed (from any other source) medical expenses and you won't owe taxes on that amount. If you took more than the reimbursable amount you may have tax and possibly penalties on the difference.

[@tdhoeffel]

If you don’t like your employer’s HSA can you move the money over to Fidelity after each paycheck contribution?

[@kennypeoples775]

It is a very manual process. The transfer takes about 10 days as well at least with my employers HSA account (Optum Bank). I transfer 500-ish dollars at a time and keep the deductible in the Optum account. The remainder goes to my Fidelity HSA account and I use it to invest.

[@JarradMorrow]

Yes, as long as you keep a minimum cash balance in the account. This minimum amount is going to be different from provider to provider so just double check with them to see what it is

[@tdhoeffel]

@@JarradMorrowthx you so much. I love your content

[@SVaya2018]

​@@kennypeoples775 we get charged a $25 transfer fee to go to Fidelity. I front load my HSA in the first 4 pay periods of the year. The employer money gets dumped in in February. Make the transfer when all the money is in. Our employer has changed HSA providers like 3 times in the last 5 years. Fidelity has been awesome.

[@brandonj.9638]

It's annoying and tedious, but rather easy to do. On a desktop it takes about Five minutes to do. Show proof of my HSA statement to fidelity, fill out a partial transfer form for fidelity, then for your current hsa, then you're good to go. You submit it and then after a couple weeks it'll go into your account. It's annoying you can't automate it, so you'll have to do it each month/paycheck if you want to but for me it's worth it to pay lower fees and have better investment options.

[@markthompson6139]

The way medical care in the us works, all you are doing is contributing money to an account that will inevitably either be drained entirely due to high cost of health care near the end of life, at which point you end up on medicareMedicaid only like the majority of the population, or you die unexpectedly before you “spend” this expense, at which point if it passes to an heir it is taxed. This is a massive front-load of work to simply match a Roth IRA which most Americans cannot afford to fill annually already. So this applies to a minimal subset of us who can fill an ira or are above the roth caps, who also can afford to participate or are privileged enough to be employed in a participating employer. No matter how much your HSA grows, you cannot anticipate how much you need to cover bills. We all die, but unlike a car/house/property there is simply no replacement cost for your life. As such, there is no feasible way to estimate how much “coverage” you need. Its why health insurance as a concept is so frustrating because it amounts to a casino gamble where the house always wins. Either you die tragically but quickly with little cost, or you drag on for decades with chronic health complications costing an insurance company huge sums of money. Eating well, exercise, and other “good” behaviors have little impact on diseases related to age. It is little wonder then that insurance companies go to such great lengths to make using their service overtly bureaucratic and convoluted. Because if you cant navigate their hurdles they dont have to pay out and they can keep more of the money you gave them.

[@Kalani86]

Is there a max amount you can contribute per paycheck or could I like invest the full amount in the first three months of the year?

[@JarradMorrow]

Great question. You can technically front load the full contribution amount for the year. However, if your HSA was fully funded and you leave the HDHP during the year, then you will have to withdraw some of the contribution from the account (source: IRS).

[@Kalani86]

@@JarradMorrow awesome, thank you!

[@Robert256]

Imagine having an extra $2000 to spend on your HSA and a health expense without having to choose

[@pleeseemailme]

Imagine having $2000...

[@TonyMoze]

Great video! Super awesome! Didn’t know this about HSA 🏥 💰 📈

[@kriticalthinkink]

Withdrawing $2000 in 30yrs tax free to reimburse yourself for medical expenses that occurred 30yrs ago would be like buying a bag of peanuts.

[@ElverGalarga88]

California and new jersey you suck, let the people keep their money

[@JarradMorrow]

Agreed