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Old 04-27-2015, 11:04 AM   #21
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While on the subject of HSAs--

I read that you can do a one time transfer from your 401K (or IRA?) of $10K to your HSA. Anyone have more info or actually done this? Looks good to me as a way to get access to my tax deferred funds as part of FIRE.

Yes, I did that last year, when I had a very small $2K ish orphaned IRA from many moons ago. You may want to check the numbers though.... But I am fairly sure the transfer cannot exceed the one time annual yearly contribution limit. Plus you are ineligible to contribute that amount for the year. Taking myself as an example... (Individual HSA).... I had the IRA rolled over to my HSA and it was around $2100. The annual contribution limit last year I believe was $3300. So for the 2014 tax year I was only able to contribute about $1200 to my HSA.
I hate paperwork and delay doing these type of minor things, but actually it was fairly painless process. I called my HSA provider and they mailed me the paperwork. I sent it back to them and they transferred the money from Fido to them within about 2 weeks.


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Old 04-27-2015, 11:08 AM   #22
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Yeah, we have good health insurance at work (government) with no deductible. All available plans are ineligible for HSA. I was just thinking of contributing to HSA so I can use it as my long term care "insurance policy".

To ensure your safe passage while walking the streets, Hnzw, I suggest you make no more mention of this insurance policy. You may find yourself mugged with your insurance card missing while all your cash was left in the wallet.


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Old 04-27-2015, 11:12 AM   #23
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Yes, I did that last year, when I had a very small $2K ish orphaned IRA from many moons ago. You may want to check the numbers though.... But I am fairly sure the transfer cannot exceed the one time annual yearly contribution limit. Plus you are ineligible to contribute that amount for the year. Taking myself as an example... (Individual HSA).... I had the IRA rolled over to my HSA and it was around $2100. The annual contribution limit last year I believe was $3300. So for the 2014 tax year I was only able to contribute about $1200 to my HSA.
I hate paperwork and delay doing these type of minor things, but actually it was fairly painless process. I called my HSA provider and they mailed me the paperwork. I sent it back to them and they transferred the money from Fido to them within about 2 weeks.


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Does it have to be done by Dec. 31st or do you have until April 15th of the next year? This looks like one of those things that might be good to keep in mind at year end to optimize accounts and taxes at the end of the year.
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Old 04-27-2015, 11:14 AM   #24
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OP, you do realize you can take money out of your HSA tax free for previous medical payments, even years ago, and you do not have to be of Medicare age. If you paid $500 for a ultrasound in 2012 (if you were under the HSA then) you can in 2015 or 2022 or whenever take out the $500 tax free, even though that $500 may have had $200 in gains since then.

Because of this feature, paying for medical expenses from your HSA while you have other non-Roth funds available makes no sense. You can even think of the HSA as your tax deductible, tax exempt growth emergency fund if you like, and spend down your normal emergency fund on medical procedures as you let your HSA grow.
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Old 04-27-2015, 11:17 AM   #25
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Does it have to be done by Dec. 31st or do you have until April 15th of the next year? This looks like one of those things that might be good to keep in mind at year end to optimize accounts and taxes at the end of the year.

Ark, I transferred back in the summer so I didn't face that problem. It would seem reasonable you could before April deadline for previous year since it is a contribution. But even if it is, do not assume they will check the correct box. I would double check their handiwork if it is legal, because you could get into needless problems over contributing for a year if they screw it up.


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does contributing to HSA make sense once retired?
Old 04-27-2015, 11:24 AM   #26
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does contributing to HSA make sense once retired?

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Ark, I transferred back in the summer so I didn't face that problem. It would seem reasonable you could before April deadline for previous year since it is a contribution. But even if it is, do not assume they will check the correct box. I would double check their handiwork if it is legal, because you could get into needless problems over contributing for a year if they screw it up.


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I should add... If one does transfer an IRA to an HSA, they are ineligible for any Roth or IRA rollovers for 12 month calendar year (not tax year). You can still do a trustee to trustee rollover, but not a rollover where your paws touched it. I almost got tripped up on that a couple months ago trying to rollover a bank Roth CD to Vanguard. Fortunately Vanguard warned me prior. I could have completed the thousands of pages and completed a trustee transfer, but I just renewed CD for 12 more months then will just get the check when it matures and mail it on the Vanguard....Much easier.


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Old 04-27-2015, 11:29 AM   #27
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RE: the once in a lifetime Trustee-to-Trustee transfer to fund the HSA....

Just remember you must be in the HSA for the 12 months following the transfer for it to be eligible to be a tax free transfer from IRA to HSA....so if you change status in that 12 months, you could be taxed or penalized.

You also can NOT deduct the Trustee to Trustee transfer from your income on your taxes for the year you do it.

2014 IRS Pub 969 instructions, page 6 gives details!!!
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does contributing to HSA make sense once retired?
Old 04-27-2015, 11:33 AM   #28
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does contributing to HSA make sense once retired?

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RE: the once in a lifetime Trustee-to-Trustee transfer to fund the HSA....

Just remember you must be in the HSA for the 12 months following the transfer for it to be eligible to be a tax free transfer from IRA to HSA....so if you change status in that 12 months, you could be taxed or penalized.

You also can NOT deduct the Trustee to Trustee transfer from your income on your taxes for the year you do it.

2014 IRS Pub 969 instructions, page 6 gives details!!!

Correct, no double freebee tax deduction! The transfer does get reported to the IRS also.


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Old 04-27-2015, 12:48 PM   #29
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I have a question, do you guys all have high deductible health insurance plans or has the rules on HSAs relaxed? Because I remember checking it out a few years back and I wasn't eligible to contribute.
Yes, to be HSA eligible it has to be a high deductible plan (there are mins and maxes) with no copays.
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