[Derrek]

Is there any point in maxing out my HSA if I don’t use the amount I max out on medical bills every year?

It’s a good emergency fund for medical bills but I’m healthy and wondering if I cut this down to max out my 401k instead.

[Tristan]

There’s actually a huge point. Save all your medical bills, but pay them in cash. Let the HSA grow.

When you need money for something else submit receipts take out money.

Then you contributed pre tax, grew tax deferred, took out without tax.

Nothing else you can do that with!

[Kristin]

HSA is better than 401k because the money isn’t taxes when you put it in or when you take it out.

View it as a turbo charged retirement account as opposed to thinking about it just for medical expenses.

[Brian]

Yes, but pay cash for every medical procedure, and covered OTC, or prescription medicine you can, and upload your receipts.

Cash out those receipts when your retired to use for bills, or whatever.

It’s great, but you have to do your research, and plan properly.

[Jason]

It is the triple treat investment vehicle. Goes in tax free, geows tax free and when used for medical expenses it comes out tax free.

Max it out at $7000 annually and pay for medical expenses from your checking accounts as much as possible.

[Bryce]

Don’t quote me but pretty sure You can spend your hsa after 65 on non medical without a penalty but you will have to pay regular income tax on it.

Your 401k is the same thing except at 59.5. So an hsa becomes equivalent to a 401k 5.5 years later but with the perk of no tax on medical.

Other consideration would though is consideration for Roth conversion ladders and the age of 55 rule with your 401k.

Might be worth really considering what your real path to retirement will be.

[Steve]

One day you will need it. The entire point of the HSA is it allows you to lower your insurance payments and maximize tax free savings for healthcare in the years you need it the least.

Take maximum advantage of that.

When (not if) you need to be spending a lot of money on healthcare and medications, you will appreciate every penny in your HSA.

[Erik]

You’re missing the point of the HSA from an investment standpoint.

[Brandon]

Yes, triple tax deferred! And use your HSA as an effective strategy during drawdown

[Leslie]

After research I think it is. You never know when you might have a large medical expense, and if your lucky and never do at retirement age you can just use the money from it understanding.

[Sandy]

Yes! If you have the ability to pay for medical expenses from funds outside the hsa do it.

Keep the money in the hsa, invest it, save your medical receipts and reimburse yourself later.

[Aaron]

I’ve never used my HSA to pay for a single medical expense in the past 5 years.

That money is invested and growing.

I don’t consider it a medical account, it’s an retirement account.

And as a retirement account HSA > 401k.

[Sean]

The best case scenario is that you max out the hsa and don’t use ANY of it during the year.

So yes it’s still worth it.

Invest the money in the hsa and keep it in there as long as you possibly can.

[David Ha]

At what point will you start using funds from your HSA? I haven’t used it for medical expenses and it has grown to over a six figure balance.

[Brian]

Max out HSA and use cash to pay all medical bills. Do not pull funds out to pay current medical bills unless that is your only option.

No other vehicle is tax free for contributions and withdrawals.

Use the funds for medical bills in retirement

[Dave]

HSA is better than 401k – triple tax free
You can use it down the line for Cobra & Medicare part B
Keep records of all your un reimbursed medical costs and you can pull money from the HSA years or decades later

[Taylor]

I max ours out and save a picture of every receipt that would qualify for HSA reimbursement in my Google drive.

The plan is to use it cover health expenses in retirement.

If we need to pull from it for any other reason then I’ll reimburse myself for some of the other expenses.

My son’s ADHD medication costs us $200/month which we pay for out of pocket.

If nothing else I can reimburse myself $2,400 a year just from that.

[Colin]

Yes. Make sure you’re investing that money within your HSA.

Contributions are untaxed, growth is untaxed, and withdrawals are untaxed for medical expenses.

After age 59.5 withdrawals can be taken for any expense and are taxed like a normal 401k.

So it’s effectively another retirement account except with the added benefit of if you need to cover a medical expense at any point you can do it tax-free.

[Author]

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