What are your current HSA plans?
I was just wondering what you guys have been doing with your HSAs (Health Spending Account), for those of you who have them. We've had one with a HDHP (High Deductible Health Plan) for 2 years now, and have maxxed it from the start and enjoy an upfront employer contribution. I do track my account on budget in YNAB, and I consider it still a work in progress so I'm not gonna go there at all in this discussion.
I know that the "best practices" à la Bogleheads and such is to just never touch it until retirement age, invest and reap the triple tax benefit (assuming it is still a law in effect by then, you never know), and until then seed your own max out-of-pocket expenses in YNAB with ordinary funds. Right? No doubt some of you manage to do that (I see you, jenmas ).
So here I sit looking at the first quarterly reimbursement of $342 for my daughter's braces, offsetting the $600 I paid for this period. I'm mulling if I should take the $258 balance from my HSA (LPFSA has already been depleted with the down payment, other adult dental work, and eye glasses for everyone). My current HSA balance is $882, with what, two more contributions this year?
I've never maintained the $2k minimum for any length of time that made it worth investing it. It just seems sad that after 2 years of max contributions by us and employer that I end up with next-to-nothing. Yet, it's really nice that our current medical/dental/vision spending is now tax deductible without having to meet a 7.5-10% income threshold.
So I'm just surveying what the rest of you in your various circumstances do, out of plain curiosity. I always want to be "responsible" with these long-term decisions, but I've found I can only make what I hope is a responsible one about once a year (this year I opened a backdoor Roth for myself!).
We use the HSA funds for reimbursement as we go. We're in a similar boat with the kiddo's braces. We had to pay the deposit and 4 months of payments out of the HSA because we didn't have a funded LP FSA the year they started (it caught us by surprise).
I'm a little curious though where the money is actually going if you are maxing it out. 2 years of maximum contributions is over $14k. Or are there other expenses that you didn't mention?
I personally have mine as a tracking account and max it out via payroll deductions. So the funds never see the budget. It’s just a once a month market changes update. I pay everything out of pocket and don’t use it for medical expenses since I can afford to do so. I have all those expenses in my back pocket that can be used to withdraw tax free in the future. However, my kids are out of the house (braces came and went) and I average very little in medical expenses. Love the triple tax benefit!
It's nice your company gives funds upfront, mine pays throughout the year and mine has a 1K minimum for investments.
I don't track my HSA account. What I do is pay my medical bills if I can with my income and if something comes up that costs more than I can afford then I just transfer it from my HSA and list it as Income to Be Budgeted or add it to the medical category.
I should start maxing it out but between trying to save for retirement (I tend to max this out) and other things I don't. I did up my contributions this year to my HSA though.
I am also aware that it may be more ideal to wait to take the money out for medical expenses in retirement, but I have not been doing that either. I've been paying current bills with my HSA money, and I'm ok with that for now.
I'm investing quite a bit in my other retirement accounts and I think I want one thing where I put tax-deductible money away and actually see the benefits before I retire. I do have enough for my deductible right now, but my deductible is only $1500, so that's not too hard. I've also maxed it out every year since I had it, and I don't have that much in it considering that (and it's not invested), but my deductible and max out of pocket used to be $3k and $6k when I was married and I got two surgeries that year that I would not have had the money to pay for outside of my HSA.
IMO it's better to max out my HSA and spend it this year than forgo other tax deductions available to me to spend post tax money on my medical expenses. I mean, I'm not going to forgo investing in my Roth or my other tax-deferred accounts that I'm not maxing out in order to spend that money on expenses that I could have used my HSA for, that just doesn't make sense to me.
A lot of the Bogleheads have high incomes and are already maxing out all their tax sheltered retirement expenses, so it can be pretty depressing to compare yourself to them...
It gets exhausting socking away every penny to never touch it for decades and then God knows what.
Right?! There are no guarantees we're all going to make it to that future. You've got to enjoy some along the way. There needs to be a balance.
Though most places have to keep records themselves so you can always contact them and ask them what you paid.
I had a friend who kept nothing about anything, and I asked her once, ok so what if you sell your car and need to pass on repair and maintenance records? She said she just calls the shop if she needs to and they have the record.
She had more time to bake cookies and do laundry than I do no doubt, but I just have this mentality that I trust NO one with personal records that I might need someday. I don't judge others who do, it's just not for me. It's a mentality I definitely inherited from my parents. And adult experience has regularly reinforced it because I've saved my own behind far more times than anyone else has.
Oh man, the girl needs 4 permanent teeth extracted next week and I just got the estimate. Thank you baby Jesus insurance is covering 80% of it and my estimate looks to be about $203. My HSA balance is now $575. So, Friday another $215 goes in and then $203 comes back out 🤦♀️.
We're so rickety and only getting ricketier. My HSA should be in Acorns or something.