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Old 07-18-2014, 02:03 PM   #21
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So medical receipts can be submitted for HSA reimbursement years after the date of service? They don't need to be submitted during the calendar year they were incurred?
I'm certainly relying on that. I've been saving those receipts for a few years. It is not a "use it or lose it" account like an FSA.
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Old 07-18-2014, 02:14 PM   #22
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I'm certainly relying on that. I've been saving those receipts for a few years. It is not a "use it or lose it" account like an FSA.

Yes, I am doing this also. But, I am very high tech though. I keep all my receipts stored in an enveloped marked "medical receipts".


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Old 07-18-2014, 04:37 PM   #23
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Yeah, but you might be able to lower it only to a certain extent. You can't defer forever. There are a few people on here lamenting how they deferred the max only to find out in retirement that RMDs pushed them into a higher tax bracket in retirement. The blog poster would very much seem to be a candidate for that. And that person might also have to figure out how to bridge the gap from ER to being able to withdraw those funds penalty free. There are ways, usually, but not always.

As someone else said, your goal should be to minimize taxes over your life, not for a particular year. If you are pretty certain your taxes will always be minimal, then deferring the max might be a good idea. But if you have no idea, you'd better do some calculations because maybe paying a bit more than 0.1% or 4% now is better than paying 25% in the future.
That's actually my blog referenced in the OP. You're right. In another 36.5 years I may have to deal with RMDs. I'm hoping to pay a TON of taxes. If so, it means I'll have many times my current portfolio and paying $100k taxes on a $400k RMD won't be so bad. I might change my tax strategy later as I approach RMD age (in another couple decades) to smooth out the tax impact, but right now, I'm keeping my taxes at or around zero.

I have over 10 years in a taxable account that will give me plenty of time to fill up some Roths using a Roth IRA conversion ladder (tax free, of course). I may not pay any federal tax until age 70.
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Old 07-21-2014, 03:17 PM   #24
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so I checked my employer health insurance, it's a HDHP. I guess I'd be eligible. So how do I go about getting a HSA? do I open an account on my own, give them my payroll info and they will do the pre-tax deduction or do I start with my employer side first?

looks like Vanguard and Fidelity have FSA accounts.

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Old 07-21-2014, 03:20 PM   #25
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My experience is that if an employer has an HDHP for employees that they have an associated HSA vendor that they make employee contributions to. So what did your employer tell you about the HSA that they have?

Otherwise, I can recommend HSA Bank. Once you have a balance above about $5000, there are no fees.
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Old 07-21-2014, 03:58 PM   #26
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so I checked my employer health insurance, it's a HDHP. I guess I'd be eligible. So how do I go about getting a HSA? do I open an account on my own, give them my payroll info and they will do the pre-tax deduction or do I start with my employer side first?

looks like Vanguard and Fidelity have FSA accounts.

Health Savings Accounts | Fidelity WPS
You need to verify that your HDHP policy is HSA eligible. Some HDHPs are and others are not.

If your HDHP is HSA eligible, typically the employer also offers a HSA. In fact, my former employer made contributions to our HSA if we selected a HSA eligible HDHP. But some employers don't offer the HSA even if the HDHP is HSA eligible.
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Old 07-21-2014, 04:46 PM   #27
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so I checked my employer health insurance, it's a HDHP. I guess I'd be eligible. So how do I go about getting a HSA? do I open an account on my own, give them my payroll info and they will do the pre-tax deduction or do I start with my employer side first?



looks like Vanguard and Fidelity have FSA accounts.



Health Savings Accounts | Fidelity WPS

If I read your earlier post correctly, you are receiving no employer contributions. If that is the case you are free to set up with who you want to. If this is the path you choose you will claim your tax deduction when you file your yearly taxes. This is just my opinion, but I think you go in with one of two strategies. Either plan on putting it in there with the idea you will be using for immediate or short term health needs thus keeping funds in the low interest bearing accounts. Or do what I am in the process of doing which is converting most of it to long term investments (15 plus years) and being prepared to bite the bullet and pay everything out of pocket while saving the medical receipts.


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Old 07-21-2014, 06:26 PM   #28
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A big benefit of going with your employer's choice of HSA provider is avoiding the 7.65% payroll taxes. If you open up your own HSA at the custodian of your choice, you will still pay payroll taxes on the amounts contributed to the HSA.
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Perhaps re-frame your goal?
Old 07-21-2014, 07:42 PM   #29
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Perhaps re-frame your goal?

I don't have any specific suggestions, but rather than looking at it as "minimizing taxes" I would suggest you look for ways to "maximize after-tax income". I've seen all sorts of hare-brained approaches to minimize taxes result in far, far less money overall. Given the human predisposition to loss-aversion, I understand where you are coming from -- but I think that looking to avoid taxes can actually lead you to less than ideal decisions.

To share a personal example of this, I left an employer in 1999 holding on to some shares of ESPP stock. I had more income that year than I would the following year, so I decided to push the tax burden until 2000 -- you know, to minimize taxes.

Come January, the stock had appreciated nicely, and now I was about 6 months away from long-term capital gains! I'll just hold it a little longer... you know, to minimize taxes.

... Not much past January the stock started to drop. Oh my. It's now back down to where it was in November. I'll just hold on a little longer -- it's only two months to LTCG! It just dropped more... but now it's only one more month to LTCG! ... and so on.

The day it became long-term capital gains I sold. Thankfully, I was still up (slightly) from where I acquired it, so I guess you could say that I did save 10% or so on taxes. However, to save that 10% on taxes, I gave up *50%* of the stock price between January and June (and about 75% of the gain from the peak to when I sold).

I honestly believe that had I framed the problem differently to myself ("how can I maximize what I can save/spend" rather than "how can I minimize taxes") I would have been better equipped to avoid that particular trap.

I realize that this doesn't apply to your situation, but I offer it in the hopes that you or others may learn from my mistake. I know that I have!

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