Why Should I Use a Health Savings Account (HSA)?
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- Опубликовано: 23 сен 2016
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Dave does a poor job of making a key point clear in this discussion - that an HSA is NOT an insurance plan - it is a savings account. Contributions to the account are made possible by participation in a particular type of insurance plan - a Qualifying High Deductible Health Plan (QHDHP). Some important things to remember about an HSA are these; (1) The money that goes into an HSA is yours. Forever. Period. You can use it for qualifying medial expenses without paying taxes on it. If you change jobs, change insurance, etc, you still get to keep your HSA. (2) As long as you are covered by a QHDHP, you can contribute up to the IRS allowed maximum ($7,000 for a family in 2019), but you are not REQUIRED to contribute a dime. It's a SAVINGS account! (3) If you are only covered by a QHDHP for part of the year, you can contribute that percentage for which you had QHDP coverage, so for example if you have a QHDP for 6 months you could contribute $3500 in 2019. If you have a QHDP for 3 months in 2019 you can contribute $1750. (4) If you lose your insurance or change jobs and your new employer does not offer a QHDHP, you can still keep your HSA, and use any funds that are in it for QMEs, but you can not CONTRIBUTE to it until you are again covered by a QHDHP. (5) You can contribute to your HSA at any time during the year. You do NOT have to make contributions with each paycheck. You can wait and make one lump-sum contribution at the end of the year (technically, through April 15 of the following year) if you so choose. (6) Contributions made to your HSA are not taxed. They are an "above the line" deduction, meaning that it's like you never earned the money when it comes time to figure your taxes. So, if your gross for the 2019 is $100,000 but you contribute $7,000 to your HSA, your taxes will be figured based on $93,000.
I've already signed up for bronze 4 on the marketplace. Deductible is high. Not sure if i can get an hsa with that plan. I think so. If not, is it too late to change?
Yup, there was so much he could have touched on that would have enlightened the guy on the line beyond what you'd read on the front of a pamphlet.
Not only that, but it may be difficult to find a bank or credit union that offers HSA accounts. They're so highly regulated that many institutions think it's not worth the necessary due diligence to offer them to the very small portion of people who may qualify for them.
Thank you Brad.
Great explanation / clarification! That helps quite a bit!
A 3rd benefit of HSA besides the tax deduction from your paycheck and tax free medical expenses that people dont talk about is that at age 65, the HSA becomes a retirement account like a traditional IRA where u can withdraw from it without penalty for non medical expenses.
I treat my HSA as a 3rd retirement account where i will try not to use it for minor medical expenses.
Eric Chan that’s amazing, I didn’t know that and what a huge benefit
But most people with an HSA also have a 401 or ROTH or an IRA..how many retirement accounts does one need?
If you're over age 65 and withdraw money from the account for non-medical costs, the amount will be taxed.
Judy Hall well, you could put in only a certain amount each yr so hsa gives additional tax advantage acct similar to traditional ira account and so i guess more money at retirement
Yes - this is a great benefit that many don't see. So if I'm understanding this right, the money you "invest is pretax"....it grows tax free...if I withdraw it for medical purposes - no tax. If after age 65 I withdraw for non medical purposes, I'll be taxed, but no withdrawal penalty...This is huge and is an awesome way to build wealth along with one's portfolio.
I love my H.S.A. It's a medical sinking fund that comes out of my paycheck pre-tax. I definitely recommend it.
Which one? I'm trying to figure out where to ope my HSA. So far it looks like Lively and Fidelity are the best two. Any advice?
@@ByMattHart - You need to confirm first that your health care plan qualifies you. For instance, my insurance is too good (I have no deductible) so I can't invest in an HSA.
@@ByMattHart My company offers an HSA with Fidelity. I have mine divided amongst small, mid & large cap index funds.
I have a employer which pays 2000 into a hsa. I use this to cover some medical expenses, but mainly have this to cover the high deductible. Plus combine with a Wellness plan it gives me another 2000 year to help pay my premiums. All this savings on medical cost goes to help fund house and retirement. One piece of the puzzle.
in addition an HSA acts like a regular 401k after age 65, i.e. you can use it for any purpose after 65 if you are willing to pay the taxes. If you spend it on medical no taxes of course. My suggestion would be to contribute the max so that at a later stage in your life you can pay for medical related expenses with tax free money. It's a great idea.
So if I have to pay taxes after 65 for non medical expenses, then what's the benefit?
@@freeagent6203 From what I gather, the money you use for non MEs after 65 is treated like a 401k. Taxes when you take it out.
The only distinct benefit is tax free money for medical expenses.
@@freeagent6203 the tax deduction of your contributions are one benefit, but you also have tax free growth if you choose to invest your HSA funds. Also, you can spend it tax free on medical expenses. Even if you don’t, you still could get the other two benefits-not to mention that many employers match HSA contributions, which effectively doubles your money. That’s also a huge benefit.
Thank you, I had more information with you that my HR from the company that I work for...
In CA, we have to pay state taxes on HSA contributions, but they are tax free federally. I max out my HSA every year.
Yet another reason to avoid CA
Good on ya for maxing it out, but get out of CA lol
NJ too
If I put a minimum amount of money into my HSA, my employer matches it. I saved money in mine for 4.5 years and used some of the money I saved to pay for the bills related to the birth of our son. My husband and I didn't have to use a penny of our emergency fund or try to save enough during my pregnancy to cover medical bills.
steve b dude, seriously... Be a man
You’re lucky u didn’t have complications. Hsa typically works for young ppl.
He says he never used his HSA. I'm not from America so I don't understand... Don't you go to the dentist every year? In my country health insurance covers that. If he says he never uses his HSA, does that mean he doesn't go to the dentist?
@@barcode628 Our health insurance plans are different from our dental plans
@@SeasoningAngels Ah, ok, that makes sense then. Thank you for answering my question.
I have an HRA. First time ever. My employer put $$ in it and through very basic tasks, I earned $$ for it too. Only had to go to the Dr once this year. The HRA $ paid for the entire visit ($165) and i paid $4 for a $50 medication with my prescription card they gave me. Still plenty of $$ left over in it too. So thankful for my insurance.
I put the difference between the hsa and top amount for a year and had my deductible amount met for the next year if needed. Always rolls over and it’s your money.
With the taxes i pay every month my health care should be free man.
They cant even pay the budget. Congress is good at spending our money.
@@hotpepper5037 They don't steal from poor people. 49% of Americans pay zero federal income tax. (Hint they aren't the wealthy). Many poor even get money back from .gov. in the form of the Earned Income Tax Credit.
@@hotpepper5037 i'm not poor but neither am I rich but they steal money from people like me. Not too poor to receive benefits but not rich enough to live a decent life. I have to struggle everyday.
You have it man, all you got to do is turn 65......
hot pepper you cant steal money from poor people, they have no money.....if you think Washington D.C. should change, start actually taxing poor people, it would change really quickly...
I have a HDHP with a$5000 deductable and an HSA. It works very well for my family and I. We just paid for our daughters braces upfront, no money out of pocket.
Jim Knapp i was told I am not allowed to use my HSA for braces...
RS1 haha you know what they meannn
Alternative way of looking at it . . . you just saved an extra $5K in a retirement account that was triple-tax-free. Congrats.
Gonna be full time rv living and this was suggested to us. Now that Dave Ramsey conformed it. We for sure going that route
Thanks Mr. Dave!
Thanks. Very simply answered my question that my employer's website did not.
Thanks this answered so many question I had without going to a person
All preventative care visits for children, women, prenatal and adults are included in all health plans that meet the federal guidelines. So even with high deductible plans you get all the routine preventative care visits without a copay or fee. The only time the deductible will matter is when a sickness or injury happens, which is why you must have money saved to pay the deductible. If you are healthy there is no reason to get a high premium plan because you may never use it above the routine checkups. The way I look at it is like this, do you want to pay for the deductible in advance in monthly payments and never end up using your insurance, or do you prefer to pay little now and "if" you ever need to really use it for a large expense then you pay the deductible.
Exactly!
Found your post interesting to watch. I can't wait to see your new videos soon. Good Luck with the upcoming update. This RUclips channel is really very informative and effective.
It works for him because he makes a lot of money but it doesn't work good for people who don't make a lot of money or go to the doctor often.
If you go to the doctor often, then your visit bill would be paid with tax free dollars
Love Dave's philosophy. Its really working for me in a lot of ways.
Thank you a lot for this video. This is very interesting and informative. Keep posting like those amazing videos, this is awesome.
This is good video!!
Man, I wish I would've started my HSA earlier. Kicking myself. We paid wayyy more with our ppo plan
Dave mentioned that he has NEVER used his HSA, which is a big mistake. HSAs should be used instead of cash for regular Qualified Medical Expenses. Common ones are rx, condoms, tampons, sunscreen, etc. You can do a quick google search to find full lists of QMEs, and should be taking advantage of your card for these expenses you're going to make anyway.
Pretty sure he is a multi millionaire and you’re not. It’s used as a retirement savings and triple tax advantage . No need to ever touch a penny compound interest
And I'm pretty sure you are not, either. Im just here to better my understanding on money and share my knowledge as well. No one is ever going to value your opinion or take you seriously if you try to belittle people when educating them btw, so if you are trying to do so with your passive agressive comment, you're wasting your energy.
Not a mistake if you keep your receipts. There's no rule that you have to claim the expenses the same year, they can carry over to future years. This is what a lot of folks do to keep that maximum amounts into a HSA that offers investment into an index fund. That's the real power of the HSA's flexibility that works to the individual's best interest.
I guess after watching this, that I have good insurance provided by my firm.
I have PPO and My PPO picks up 100% of medical costs after a $20 copay for primary care doctor, $33 for specialist doctors and $50 for hospital/ER/Surgery.
The cost of my premiums per month for myself and my wife are $137 for both of us to get coverage.
I'm currently looking for health insurance...is that something everyone can get? If so where do I sign up?
lucky you
My job puts in $500 a year in my hsa account. My deductible is $1,000, no co pay. Pay about $160 a month out of my check
My hsa is $11.50 a week, 5,000 deductible, $20 copay and my company puts in $5 a week towards medical bills.
FYI, besides doctor visits, you can also use an HSA to buy tax-free approved things like contact solution and family-planning items.
Also also, you can claim mileage & toll reimbursements for medical visits. So now every time I visit the doctor, I can claim mileage and withdraw the pre-tax funds I've contributed as tax-free.
Due to these, imo it is definitely worth having at least a small contribution coming out of your paycheck for your HSA even before step 3, not as an investment but as saving money on your budget.
After learning how to manage my income by listening to Dave I've finally reached the point I'm trading markets and building my own business
Thanks for this great video! People can save a ton on money by thinking outside the box when it comes to healthcare. I really enjoy sharing tips for saving money on health insurance, medicine, doctors visits, etc... Healthcare is the #1 reason for bankruptcy, but should be the #1 way we are saving money! Thanks for all you do!
My net worth is close to 2M. I am 59. If I retire, I will have to pay for health insurance out of pocket. Will my net worth be used to determine my healthcare premiums or will it be my yearly income?
I like the idea of not paying on 7k worth of income. Plus, it can be investing in a mutual fund.
Just bumped mine to maxout today.
Be careful of the fees - he's only talking about the tax advantage, without mentioning the mandatory annual fees that draw down and may eliminate investment gains. For example, my HSA has administrative fees of 3% to 7% annually depending on the balance. And there's more fees to participate in any of the investment options.
You have a terrible HSA. Consider switching. There are good providers out there.
Here's two: Fidelity, Lively.
@@RahulPawa those are honestly the two best ones too! 😂
The other thing is that if you do not need the money because you are healthy, generally, amounts over $2000 can be invested. In most HSA plans you have to keep $2000 in the cash balance acct but the other amounts over and above $2000 can be invested. If you never need that, all of those invested dollars and earnings that the invested are not taxable when you use them for expenses. Keep records of all of your expenses if you pay it out of pocket, and then down the road, you can take out the money to reimburse yourself and you are not taxed on it. Do that before you turn age 65. Once you turn age 65, You can draw out of it money over and above the amounts that you would reimburse yourself for, and then you are only taxed on those amounts at your ordinary income tax rate. It's a great additional bucket of savings for your retirement.
Rachel: "Dad, I think I broke my arm."
Dave: "Beans and rice. Rice and beans."
I max out my HSA every year. It’s a nice savings account.
I'm confused on how the people on RUclips are talking about "investing" with an HSA. I don't see anything in my insurance that describes HSA and chosing investments once it's in there. I am also not sure about how it rolls over.
I don't use one because I never go to the hospital really. However some coworkers do have accounts because their family has many medical needs. Smart idea for them to have those funds sitting there when needed. especially when they know they will need it every year or every few years.
One day you will be it and wish you had it.
Bad idea jeans..
If you don't have a lot of medical expenses now, you should definitely get an HSA.
The first benefit is the premiums are lower with an HSA qualified plan. You could have the low premium plan and not contribute to the HSA. Then you would miss out on the second point.
Second, money put into the HSA is pre-tax, can grow in an investment tax-free, and can be withdrawn for medical expenses at any time in the future tax-free.
And finally, those future medical expenses will come eventually. It's best to have money set aside for that. If you're lucky enough to live your whole life without medical issues, then you can consider the HSA to be an extra retirement account.
HSA's are best started when you don't have medical expenses! If you can't contribute the max I'd recommend at least contributing the difference of the PPO and HAS premiums. That way if you lost the HSA option, your budget won't be in for a shock. Instead of the insurance companies having that money you'd have it for medical costs or retirement.
Nobody mentions the BEST reason to get an HSA. Deductible is somewhat higher but max annual out of pocket is like 1/3 that of PPOs. This is good because hitting your deductible isn't going to bankrupt anyone but getting in a car wreck or cancer can. That's what you want protection from, the black swan event. HSAs are amazing. Everyone who has one loves it, myself included. When your balance reaches 2k or 2.5k (depends on your provider) you can invest the money into mutual funds. The HSA should be the 2nd thing you fund, after 401(k) match. It beats Roth IRA and non-matched 401(k) contributions, as well as ESAs/529s, etc., by MILES.
Instead of low deductible high premium, u pay for your own healthcare until u meet the deductible and low premium it seems like the same cost in 1 year?
HSA are really only great if you don't visit the doctor frequently. This is a piece most people and advisers miss 🙃
I am learning more HSA. I need to contribute.
And invest it.
I am so confused about HSA’s ... why does my employer do all of the contributing? Is that normal
That's a great benefits! Call Health Equity if you have questions.
Is no one gonna talk about how Eric replied "BETTER THAN I DESERVE" at 0:08? 😂
This sound super familiar to an Index universal life policy 🤣🤣
Thanks Mr Ramsey, you really helped clarify HSA's
Do not have to worry about this now, On Medicare las year spent 10 days in the hospital bill was 550K, costed me $650 that included the 24/7 ER visit, Ambulance ride and hospital bill
HSA are not made equal. Some HSA have fees so high it make sense only if you deposit quite a bit of money every pay period, and to deposit that much you need to make quite a bit of money. Otherwise you hand the money you saved on taxes to the bankers.
My HSA fees are the sole reason why I won't invest a single penny of my own money into it. My employer does so I do have some money in there but still. Having to pay $3/month just to be able to invest any portion of that money and then pay expense ratios on top of that is BS. So I just use it as a 0% interest earning sinking medical fund that I don't put my own money into.
Dave also left out the fact you can invest your HSA money and it grows tax free next best thing to an Roth IRA
Yes, but you need to check out the associated fees. Not all HSA brokerage firms are "free".
1:52 Dave reveals he is in the 35% tax bracket 😂😂😂
I just spoke with my insurance agent. She recommends an HSA for me. I suggest talking to your agent and seeing if it is a good thing for you. As a single person, I can contribute $5400. I can also contribute $1000 because I'm 58 years old. I will have a tax write off of $6400, meaning that I will lower my income tax by $2000.
I’m satisfied with my PPO
Me too! I have PPO with HSA. This a combo that works great!
Money Expert - Stephanie
Which PPO do you have? Are you self-employed?
Good way to stay poor
Maybe one day i can afford health insurance my wife and i make 50k a year. Went to marketplace the most affordable plan was 69 a month premium but with a 12,000 deductible 🤷♂️
Dave please comment on non insurance health sharing plans vs insurance.
Man, he really knows nothing about ACA. Discouraging his listeners not to take advantage of the market, which offers many HSA plans, is a disservice.
John Frank the ACA is a piece of junk, no body with a brain wants it.
@@theblackwings33 I was actually taking about "a" body
Hi i have health insurance with health connector, can i use that plan to get enrolled in HSA plan? txs
Dave missed some points on this HSA inquiry. What he mentioned is only half. It's better to research on true financial advisers or experts. HSA is not an insurance. And he didnt dwell clearly how an HSA can compound growth. And obviously, he is always an anti-Obamacare. Well, my point is to do your own diversified research and dont just follow what he advices.
Obamacare sucks
It rolls over every year, after retirement you can use it for anything, before it has to be medical. During deductible period, you get the insurance covered negotiated rate. Employer pays half of deductible. Triple tax break. Bills show up online on your HSA account to pay. You also get card to use in person. There’s a yearly cap you can contribute to over your deductible. Same list of doctors as BCBS. Earns interest or can put in market after benchmark.
Have a HSA with 10k or 20k in it with a high deductible insurance plan. Use FSA to deal with small cost items.
There's rules against having both an HSA and an FSA, unless the FSA is only for dependent care, dental and vision. You can't use FSA for health expenses if you have an HSA.
Hi Dave
I had FSA where I worked but I didn’t have access to HSA and have a surgery for my disability every 3 years that costs over $125,000. I was just released ( but not fired ) from my job recently and am looking for a new job and probably can only get one that pays maybe $20.00/ hour. ACA isn’t so stupid when that is all that is available to keep a person alive is it now?
I don't believe the money in an FSA rolls over like an HSA
@@jimhandler1129
True
But my question concerned the Affordable Care Act. Earning a very low wage salary with extremely expensive healthcare insurance costs while ( because I have a disability but I am not disabled ) how am I supposed to pay for the insurance bill
@@daveicc495lies by the government, all the "affordable care act" did was expand completely rediculous insurance coverage to people who still cant afford it 😅😅😅..HSA accounts are solid
If you’re really health and young, HSA is ok. But if you go to specialists, have tons of prescriptions, etc. then you need a PPO type plan.
PPO plans can have an HSA if the deductible is high enough.
@@RahulPawa You’re right. I meant a non- high deductible plan type.
Why do I need an has? I will spend my deductible before I am able to fill my hsa next year, in a tax free way. So it won’t be tax free dollars. Will it still get corrected when I do my taxes later?
My HSA offers investment into the market. If I invest, but then need the money (since I haven't yet built up much of a savings account), would the funds be locked into the market and unavailable?
Like any other investment you can buy and sell at any point. However, those monies are subject to market prices. If the market crashes 50% and you have a heart attack, you'll only have half of what you put in if you need to cash out and pay those medical bills. Investments in these accounts are generally restricted to investment grade options to limit volatility. I would keep 1 year of MOOP cost as cash in the account before you consider investing HSA funds. That way you have a least a year to let funds recover from a down turn in the market.
R Solo great question
Tim Smith great answer
I have a deductible of 4k/year so I keep 4k in the HSA cash account and the rest gets invested in the HSA investment funds. If I need to pull from it I can, but that's only if I exhaust my cash portion and need more. So a market downturn won't necessarily hurt too much.
Plus with an HSA I write off 8100 a year on my taxes. Thats a direct writeoff, not a percentage of medical bills. I will slowly build it up over the years.
If I spend money on my high deductible towards my deductible after taxes not using the hsa I can still write it off at the end of the year correct?
Question: I have an HSA account from my previous HSA plan which is no longer active as I moved to my spouse's HSA plan.
Can I put my own after tax money directly to HSA bank account and invest?
Would the limit be same of $3650?
and would there be a tax on gain?
What was he referring to when he said to only put in extra money into the HSA after step 3?
Baby Step 3 is where you finish the emergency fund and have 3-6 months of expenses saved up. Dave is saying once you accomplished this to put 'extra money' into an HSA.
Hey guys any info what type of QHDHP should be used inorder to enroll in HSA? TNXS
So how do I turn my HSA from a savings account to an investment account??
What if you don't need to use the HSA? How do you get your money? Do you get penalized if you take it out for non health purposes?
If you use it for non medical purposes before a certain age, you will pay tax and a penalty on those amounts. After that age, it is taxed as regular income, no penalty fee, for non medical purposes.
where can you get and find one
Any bank just ask for an HSA account..
I just started a new job that offers an HSA. Would an Hsa be a good option if you're still on baby step 2?
Like Dave said, HSA is solid for someone that always has medical expenses in a year or does not ever have medical expenses in a year. Ideally, you want to be the latter.
HSA is fine for baby step 2 but make sure you are either contributing to the HSA saving account (to take advantage of the pre-tax money if you have a medical expense in the year) or by having a strong emergency fund (close to your deductible, which is usually around $2k-$5k) or both.
Ideally, you contribute to the max to your HSA account for 1-3 years before ever having to use it on medical. At that point, youll have enough to cover your deductibles full amount in all years after that. Obviously that is best case scenario.
There is a worst case, but to prevent that, PLEASE have a strong emergency fund. Having an emergency fund really makes HSA and other financial decisions way less stressful.
Hopefully this helps.
I remember when Dave Ramsey's show used to be on 'AM-560 The Answer, Chicago' where I live in Illinois.; Why was it taken off the air & replaced by 'The Larry Elder Show'?...
At the end of the day, do you value money or your health? He might not have to use his 150K now but a couple of by-pass surgeries would nope that out in no time. Also, he fails to address the health-care providers (doctors/specialists) that comes with HSA vs PPO. Even with the 100% coverage you might not be getting the best cares when you need them.
what? He would reach his 5 or 6k deductable for the year. Also HSA is accepted by pretty much every health care provider. PPO would most likely have the issue
"HSA" plans can be PPO, those are not mutually exclusive. Maybe you're thinking of HMO?
Our insurance has the same network, the only difference is how much we pay vs the insurance company and when.
Some doctors I've noticed ask for a certain amount upfront when on an HSA plan. But they work out the difference in the end.
My new job I started recently emailed me information about benefits enrollment and they have a some blue cross plans where one of them is the premiers blue cross health savings plan (high deductible with HSA) and the other one I’m debating is the shared deductible plan but that one doesn’t come with the HSA of course. I don’t know which one is the best one
If you are healthy with no medical conditions, the HSA is a great way to invest because of the triple tax savings. As such, I would highly recommend it, if your annual medical costs are low.
@@modernmoney0 I ended up signed up for Shared deductible plan and that didn’t come with HSA or FSA but then signed up for the FSA separately which came in handy cause with the Texas winter I used to buy hands warmer and a leg massager
I disagree here. One visit to the hospital and your HSA is gone. A simple visit to the doctor could cost you hundreds with an HSA until you meet your deductible. You don't get sick until you do.
So does it role over year after year ? Can at anyone point and time can I take it out and place into my 401k or IRA with out any penalties?
Rolls over year over year, yes. Non medical withdrawals preretirement incur a 20% penalty.
If my employer is paying 100% of my health insurance (so I'm not paying any premiums on a low deductible plan currently), does it make sense for me to go to a HDHP and open an HSA? I guess I'm not sure if the tax savings offsets the out of pocket that I would have to pay.
HDHP really only make sense if you don't.visit the doctor frequently. That is awesome your employer pay 💯 of your health insurance cost! I'd then contribute as much as you can to your 401k -next best thing.
@@StephanieKremic Thanks for the feedback!
@@StephanieKremic401k is only as good as the maintenance fees attached to it...from my research anyways....allllllot of americans have gotten screwed over in retirement to see their savings depleted by those pesky and unethical fees...there was a whole 60minutes special on it
the way to go is government single payer system like we have in Canada. i like having my health care without having to ask for it , i like the idea of fate knowing what i want and making sure i have it without having to ask for it.
Question does making deposits into my hsa offset or lower my federal tax liability??
So did I hear that you should not us it as an investment vehicle, say invest in a index fund? Love your shows!
Why wouldn't you? If you aren't investing the extra money you're technically losing buying power due to inflation.
You can liquidate funds as needed to pay for bills as well.
Geniuses in my company make hsa premiums (for us folks making more than 200k ) almost identical to the HMO premiums.
If you make 190k, your premium is 700 a year, if you make 200k, it's $4300.
Unreal.
So Dave has nearly $150k in a HSA wow considering you can only find what up to $3.5k a year and they are fairly new how is that possible?
K Roddy I checked. They started in 20”3. So he could have invested ($7k * 16=) $112,000. Add compound interest and stock returns to that and you’d get his amount. Probably even less invested as I don’t think he hoped right on board. But whose to say he didn’t.
It's not that hard if you max out, seldom withdraw, and invest the savings into a high growth, low fee, equities fund.
I have a HMA it’s great to have too check it out if u haven’t I think it a great choice.
what happens if you leave your job. then what do you do with that hsa? can you roll it into a different account ? can you roll it into the new job if they offer HSA ? or do you let it sit there?
You can roll it to another hsa account or you can just let it sit there
Yes to all of the above. You can do any of those things. I'd suggest rolling it to a no-fee provider with good investment options.
You can also have more than one HSA (e.g. a personal one and one through your employer), though your contribution limit applies to both accounts together (not separately).
I am currently maxing out my HSA and investing any contributions. My goal is to get my balance high enough and eventually move into dividend paying stocks and let the dividends received pay any medical expenses incurred.
When you invest, do you have to pay a fee for investing? I have an HSA but I don't invest bc of the associated fees they are coming up with. I have a separate ROTH instead where I pay zero fees of any sort and keep my HSA balance as a financial "cushion"
@@mathisnotforthefaintofheart My HSA does not charge any fees. However, some do charge fees but are usually not too excessive. I would do research on your particular plan and come up with a path based on what you felt comfortable doing. I have had great success investing with mine and hope you do as well.
Dave, or anyone else. If you contribute to a HSA outside your employer deducting from your paycheck, then can you get the advantage (pre tax) at the end of the year with your tax return?
My employer does not offer a HSA, but they will help me pay the premium.
Yes. You will just need to get a 5498-SA from the HSA custodian for your taxes. Good question
Mostly yes.
If you contribute to your HSA through your employer, this is often exempt from Income tax AND Social Security & Medicare taxes.
If you contribute to an HSA directly, you can claim it as a tax deduction to recover the income taxes paid, but there's no getting back the money you paid on Social Security & Medicare taxes.
After they gutted Obama care We all saw our insurance premiums spike, So I’m wondering why they would hate a lower cost plan
Is there any cons having a lot of money in this account when you report your taxes every year ???
Thank you
Dave, I hope you go to jail for fraud
Didn't explain what a premium is, nor a deductible, nor out of pocket maximum. Great I can invest my money, but I have no idea how my plan works. For such a devout Christian, you ride a high horse. I'm glad you've done well for yourself, but I don't understand why you must boast about it.
What if my employer offers health insurance but no real HSA. Can I just fund one independently like at fidelity? Or is that a bad idea?
No, that is not a bad idea, but you need to check out the rules and fees. If your healthcare plan is not a QHDP (Qualified High Deductible Plan), then you cannot fund an HSA. If this is thus not working out, instead have a good financial cushion and open a ROTH.
My question would be is it better to simply try and cover your medical bills and allow the HSA to just grow? I understand the pretax and after tax argument. Use the HSA only if it’s catastrophic and allow HSA to stay invested and grow?
Yes that's the best way to treat an HSA if you can. Save all medical receipts you make and you can use them to reimburse yourself from the HSA tax free
@@RealMcLovin thank you
Is there a interest rate on the cash you contribute to the HSA, almost like compound interest?
There's a small interest unless you invest the funds.
check their website. Usually you can invest in a mutual fund. Look for an S&P Index fund in there and just use that.
I'm not sure he fully understands how great HSA's are. It probably doesn't mean much to someone as wealthy as him so he never really paid much attention, but for us regular folks, an HSA can be one of the best savings tools out there for many reasons. I regret not really looking into them earlier in my career. I'm starting late, but better than nothing. If used strictly for medical expenses, it is a triple tax advantage (tax deferred, tax sheltered, and tax free withdrawal). That's like an IRA and Roth IRA combined. If withdrawn for other things, after 65, it is taxed, so then it would just act like a 401k/IRA, so better to use it for medical expenses, but even if you don't you are still getting the benefits of a tax sheltered account. If you're eligible I would highly recommend them.
I regret not educating myself years ago when my company announced we could start investing our HSA funds. I only put in my annual deductible. 10 years from retirement and I decide to start planning and realize my out of pocket health care coverage will be a hefty monthly bill. I’m now maxing out my HSA contributions and investing in an index fund.
My hsa is $374 per month and $6000 ded....i cant afford that...so no insurance for me...i have my own savings plan
I’m looking into my company’s HSA plan (fully covered by them) but I see that I would pay 30% after reaching my high deductible. Is this still worth it? I heard Dave say In this video his is covered 100% after reaching the high deductible. Would you still recommend me to sign up for mine if I have to pay 30%? Thank you!
Keep in mind that I don’t have to pay anything monthly due to the company covering it for me. I’m on the reg PPO as of now. Thanks!
HSA plans are a scam. health insurance is so you can go to the doctor when you need and should not be seen as a retirment account. under an HSA my doctor cost 120 a visit under my ppo he costs 40. that is a %60 savings by having a PPO. let's say you have to go once every three months, it will be the same as going once a month under a ppo. granted your insurance is covered by your employer however in a normal case i would only switch if the savings on the premium can go into your HSA and cover your medical bills, also if you are on any meds those will be going up substantialy.
I understand that if I setup contribution to HSA through my employer it goes pre tax. But if I put in the money I have in bank which is already taxed, how do I get my tax paid on that amount back?
You claim a tax deduction when you file your taxes for that amount. You will only get federal taxes though, paying through your bank and not paycheck means you also paid FICA taxes and that doesn't come back.
If I have medical bills in a previous year (2019) and open an HSA now (2021) can I pay into the HSA and use those tax advantages and then use those funds for those medical expenses?
No, it only applies to medical expenses that occur after you get the HSA.
@@LukeofAllTrades. Thank you for letting me know!
Yea its great if you have a decent income however it has no benefits if your income is not that great
mechelle not true if you’re low income just save your premium you would have spent for a year in an hsa and just keep saving by the premium. It builds
Should I if I’m about to go to grad school within 18 months of starting this position?
How do you move your money from your HSA account into an investment account? Sorry this is my first year having an HSA and I don’t understand all the details.
The process may vary depending on the bank holding your HSA funds and whether or not they provide the investment options themselves.
Why do we have $1800 premium and $3000 deductible? Healthy chiropractors. We just pay either way.