Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
HSA contribution question
Old 01-29-2008, 11:32 AM   #1
Thinks s/he gets paid by the post
 
Join Date: Dec 2007
Posts: 4,764
HSA contribution question

If I understand correctly a HSA can be funded with pre-tax or after tax money? If so can 403b/401k monies be transfered to fund your HSA? Pardon if it is a blatantly obvious answer. I want to confirm that I am understanding it correctly.
__________________

__________________
Notmuchlonger is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 01-29-2008, 01:39 PM   #2
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 2,925
I think you are correct that it can be funded pretax or after tax (after tax can be deducted (an adjustment actually) even tho you don't itemize. Here's something to read
http://www.ustreas.gov/press/releases/hp209.htm

I scanned it briefly---saw something about transfers from FSAs and also IRA but
not 403b/401K tho. They are changes for 2007----I assume they are effective starting in 2007 and not only for 2007 but I'm not sure.
__________________

__________________
kaneohe is offline   Reply With Quote
Old 01-29-2008, 02:14 PM   #3
Thinks s/he gets paid by the post
 
Join Date: Oct 2005
Posts: 4,898
Check out the Treasury Dept. FAQ. There may an answer somewhere in there.
U.S. Treasury - HSA Frequently Asked Questions - Employer Participation in HSAs
__________________
Zoocat is offline   Reply With Quote
Old 01-29-2008, 03:19 PM   #4
Thinks s/he gets paid by the post
 
Join Date: Dec 2007
Posts: 4,764
Appreciate the help. I have trouble believing that I could move tax deferred money into something that I can eventually spend tax free. So Im double and triple checking to make sure Im understanding it right
__________________
Notmuchlonger is offline   Reply With Quote
Old 01-29-2008, 03:51 PM   #5
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 2,925
There may be others but I don't know of any other things that are triply advantaged like the HSA: deduction going in, tax deferred while in the plan, nd tax free coming out. Btw....why would you want to move the 401K type funds into an HSA instead of just funding it separately to get more tax advantaged funds working for you (unless there were no other funds available)?
__________________
kaneohe is offline   Reply With Quote
Old 01-29-2008, 05:34 PM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,961
Quote:
Originally Posted by Notmuchlonger View Post
Appreciate the help. I have trouble believing that I could move tax deferred money into something that I can eventually spend tax free. So Im double and triple checking to make sure Im understanding it right
That's my understanding too, so I'm putting in at the limit of pre-tax or tax-deferred...
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Old 01-29-2008, 05:40 PM   #7
Thinks s/he gets paid by the post
 
Join Date: Dec 2007
Posts: 4,764
Quote:
Originally Posted by kaneohe View Post
There may be others but I don't know of any other things that are triply advantaged like the HSA: deduction going in, tax deferred while in the plan, nd tax free coming out. Btw....why would you want to move the 401K type funds into an HSA instead of just funding it separately to get more tax advantaged funds working for you (unless there were no other funds available)?
Maybe I am not understanding something correctly. If I was retired wouldn't it be better to move 401k money that has avoided taxes into my HSA. That way when I spend it on healthcare it would be truly tax free. When I am retired I will have 3 sources of income a small pension/SS and my 401k. I dont mean to be slow on the uptake just trying to understand this all.
__________________
Notmuchlonger is offline   Reply With Quote
Old 01-29-2008, 07:59 PM   #8
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 2,925
Quote:
Originally Posted by Notmuchlonger View Post
Maybe I am not understanding something correctly. If I was retired wouldn't it be better to move 401k money that has avoided taxes into my HSA. That way when I spend it on healthcare it would be truly tax free. When I am retired I will have 3 sources of income a small pension/SS and my 401k. I dont mean to be slow on the uptake just trying to understand this all.
Interesting question......I guess I'll have to sleep on it.
I guess my initial thought was that the more tax advantaged money you had working for you, the better. If you transfer the 401K money (assume it was all of it),then all you have is the HSA. If you put in new money, you have the HSA as well as the 401K. You get a "deduction" for the new after tax money but I don't think you would with the 401K transfer since you already "took it" when you contributed to the 401K (you might want to verify that at
fairmark.com ).

Btw, I guess even tho the link I provided did not talk about 401K transfers specifically, I suppose you could indirectly do it by rolling the 401K money into an IRA first if you had to. Again would be good to verify that and also think about advantages/disadvantages of 401K vs IRA.
__________________

__________________
kaneohe is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Dumb question on spouse's Roth IRA contribution Nords FIRE and Money 1 01-23-2008 02:38 PM
401k Contribution question laurinsane FIRE and Money 7 01-22-2008 12:49 PM
Make HSA Contribution if Not Paying Tax? TromboneAl FIRE and Money 11 01-08-2008 04:20 PM
Contribution limits utrecht FIRE and Money 7 06-07-2007 12:51 PM
HSA Contribution Timing TromboneAl FIRE and Money 7 12-13-2005 05:20 PM

 

 
All times are GMT -6. The time now is 05:54 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.