Redux - how much in each person's HSA?

[spncity]

My thread/post search abilities fail me.

Question 1: I thought I remembered someone advising me to put most of the max annual + catch-up x 2 = $8750 contribution into an HSA in my name and a little in DH's name.

Can't remember why, or if that was said.

DH is not working this year. I picked up a client (sole proprietorship) while we were waiting for our house to sell. (Found out we're having a grandchild, took house off market.)

Opened one account in HSABank.com earlier this year. Not yet funded, but at least had their one cent making it "active" before we had medical expenses.

Question 2: Also just want to double-check that I can fund the 2016 HSA money by April 15 of 2017. Yes?

Thanks for any input.

Kindest regards.

 

[NW-Bound]

HSA and IRA both reduce your taxable income when you make a contribution.

With IRA, you pay taxes when you withdraw. With HSA, you pay no tax when withdraw to pay for certain medical expenses, and who doesn't have medical expenses?

Here are some conditions on how you can spend your HSA.

• Prior to age 65 HSA funds cannot be used for health insurance premiums but can be used to pay for qualified medical expenses such as co-pays, deductibles, dental care, etc...
  
• After age 65 HSA funds can be used to pay for health insurance premiums including Medicare Part B premiums and long-term care insurance premiums.

If money is withdrawn to use for non-medical expenses, you will pay 20% penalty in addition to tax prior to age 65. After 65, you would pay tax but no penalty, which means the same tax treatment as IRA.

See: https://www.thebalance.com/hsa-vs-ira-you-might-be-surprised-2388481.

 

[mpeirce]

My thread/post search abilities fail me.

Question 1: I thought I remembered someone advising me to put most of the max annual + catch-up x 2 = $8750 contribution into an HSA in my name and a little in DH's name.

If one or none of you is contributing to the HSA you can put it into one account. If both are contributing catch up amounts, then you need two accounts.

Catch-Up Contributions. For individuals (and their spouses covered under the HDHP) age 55 and over, the HSA contribution limit is increased by $1,000. If both you and your spouse are age 55 or over and not enrolled in Medicare, you each get a catch-up. You cannot contribute more than $7,750 ($6,750+$1,000) into one HSA for 2016. Catch-up contributions should be made into each spouses’ respective HSA.

 

[NW-Bound]

Oops, I did not answer the questions properly.

About question 2, yes, the deadline is April 15, according to many Web sites.

 

[bingybear]

My thread/post search abilities fail me.

Question 1: I thought I remembered someone advising me to put most of the max annual + catch-up x 2 = $8750 contribution into an HSA in my name and a little in DH's name.

Can't remember why, or if that was said.

DH is not working this year. I picked up a client (sole proprietorship) while we were waiting for our house to sell. (Found out we're having a grandchild, took house off market.)

Opened one account in HSABank.com earlier this year. Not yet funded, but at least had their one cent making it "active" before we had medical expenses.

Question 2: Also just want to double-check that I can fund the 2016 HSA money by April 15 of 2017. Yes?

Thanks for any input.

Kindest regards.

If one or none of you is contributing to the HSA you can put it into one account. If both are contributing catch up amounts, then you need two accounts.

https://www.hsaresources.com/pdf/HSA_Resources_Eligibility_Contribution_Worksheet.pdf

Catch up deposits must be put into the HSA of the owner assuming they qualify (55 + years old, insured with an HSA plan and not insured by a non-hsa plan). So to fund both spouse's HSA catch up, you must use 2 accounts.

 

[spncity]

Thank you for responses!

Okay - now that I have the max amounts including catch-up for 2016 and 2017 correct in my head, perhaps I should do the HSA contributions this way, for both years, sometime in the first three-and-a-half months of 2017:

HSA One: $4350 plus $4,400 = $8,750 counts for two years

HSA Two: $4350 plus $4,400 = $8,750 counts for two years

The reason not to do each one before year-end is that most banks charge a monthly fee if the account holds less than $5,000.

Thoughts?

(Please note: my figure of $8750 for 2016 should have been $8700 I believe)

 

[bingybear]

Thank you for responses!

Okay - now that I have the max amounts including catch-up for 2016 and 2017 correct in my head, perhaps I should do the HSA contributions this way, for both years, sometime in the first three-and-a-half months of 2017:

HSA One: $4350 plus $4,400 = $8,750 counts for two years

HSA Two: $4350 plus $4,400 = $8,750 counts for two years

The reason not to do each one before year-end is that most banks charge a monthly fee if the account holds less than $5,000.

Thoughts?

(Please note: my figure of $8750 for 2016 should have been $8700 I believe)

I have not checked your number for each year. You're are missing the 1 cent that HSA BANK seeded your account. This will throw you over for one year. The penalty is not significant, but the custodian may charge a large fee to process the over contribution.

What you are suggesting will likely work, sans the 2 cents (1 each account). The question is how do you plan on using these accounts? Do you want to fill one up to where there are no fees? Then the excess in the other could be used for investing. I'm not sure what your objective is in the HSA. Do you want to be paying bills out of both accounts or just one?

 

[spncity]

You're are missing the 1 cent that HSA BANK seeded your account. This will throw you over for one year. The penalty is not significant, but the custodian may charge a large fee to process the over contribution.

Wow, I'd never have caught that. But I guess they are a smart outfit... I just reviewed the HSABank statement and they deposited 1 cent and then withdrew 1 cent

As for the purpose - if it works out, I'd like to invest the money as HSABank does have that option. Eventually we can use the bucks to reimburse for saved medical receipts and for Medicare supplemental insurance policy payments.

Save
Save​

 

[MichaelB]

As for the purpose - if it works out, I'd like to invest the money as HSABank does have that option. Eventually we can use the bucks to reimburse for saved medical receipts and for Medicare supplemental insurance policy payments.[

Sorry, but you cannot use HSA funds to pay for Medigap premiums.

 

[spncity]

Sorry, but you cannot use HSA funds to pay for Medigap premiums.

Good to know - thank you.*

I guess I can use it for Medicare parts A, B, and D.

About how much is that these days?


*this forum is the best.

 

[bingybear]

last I checked they had not pulled my 1 cents. I'll have to check again. would be really stupid to do ACH transaction for 1 cent each.

 

[travelover]

Just checked - my account is up to $20K and I can contribute another $4300ish this year, plus a pro-rated amount next year when I hit Medicare age mid-year.

 

[spncity]

Medicare parts A, B, and D.

About how much is that these days?

How much is the going rate these days?

 

[Senator]

My HSA has $12,719.59 as of this AM. I have maxed it out every year it was available to me.

The first two years my company offered it, I pulled all the money out and invested it after tax. I did not realize the power of keeping it in there until after age 65 or beyond.

An HSA is some of the best savings money you can do, especially if you can do it while working and avoid a medicare/Social Security taxes on that money. Better than a Roth.

I plan on paying medicare premiums with it, or reimbursements after age 65, as I am using the VA exclusively for my healthcare needs until then.

 

[Big_Hitter]

zero

 

[sengsational]

Been maxing it out for 3 years, so it's at about $7.6*3. I did spend from it (a little bit) the first year, until I saw the error of my ways.

 

[LiveBelowMeans]

Been funding the HSA for years and letting ride in a Vanguard stock fund at Optum. Over 6 figures now.

 

[Sue J]

We had HDHP for only 2 years and made full HSA contributions plus one $1000 over 50 for both years. I took out $12,000 in the year that I had a hip replacement. What's left is nicely invested in Wellington. We have already paid expenses and could withdraw the rest but are leaving it in the HSA for now. Maybe we will have HDHP sometime again. 3 years until Medicare.


Sent from my iPad using Early Retirement Forum

 

[ChrisC]

HSA and IRA both reduce your taxable income when you make a contribution.

With IRA, you pay taxes when you withdraw. With HSA, you pay no tax when withdraw to pay for certain medical expenses, and who doesn't have medical expenses?

Here are some conditions on how you can spend your HSA.

• Prior to age 65 HSA funds cannot be used for health insurance premiums but can be used to pay for qualified medical expenses such as co-pays, deductibles, dental care, etc...
  
• After age 65 HSA funds can be used to pay for health insurance premiums including Medicare Part B premiums and long-term care insurance premiums.

If money is withdrawn to use for non-medical expenses, you will pay 20% penalty in addition to tax prior to age 65. After 65, you would pay tax but no penalty, which means the same tax treatment as IRA.

See: https://www.thebalance.com/hsa-vs-ira-you-might-be-surprised-2388481.

You don't have to be 65 or older to use HSA funds for LTCi premiums. Been doing that for years and I'm now 63.

https://www.irs.gov/publications/p969/ar02.html#en_US_2015_publink1000204081

 

[Rustic23]

0

 

[Bamaman]

I was so fortunate to retire at 58 1/2 and have a retiree health savings account with enough in it to fund my share of the health insurance @ about $420 per month until 2 months shy of getting on Medicare.

 

[rodi]

We've only done HSA for 2 years. Last year we didn't use it to pay for our hefty medical bills, this year I have used it to pay for some of DS's surgical costs.

Me and the kids account - around $4k balance.
DH - around $4k balance.

DH goes on medicare in January - so we'll use his account for the deductibles for his plan F+ deductible.

I'm staying on an HSA plan - and will be maxing it each year.

 

[Finance Dave]

HSA and IRA both reduce your taxable income when you make a contribution.

With IRA, you pay taxes when you withdraw. With HSA, you pay no tax when withdraw to pay for certain medical expenses, and who doesn't have medical expenses?

Here are some conditions on how you can spend your HSA.

• Prior to age 65 HSA funds cannot be used for health insurance premiums but can be used to pay for qualified medical expenses such as co-pays, deductibles, dental care, etc...
• After age 65 HSA funds can be used to pay for health insurance premiums including Medicare Part B premiums and long-term care insurance premiums.

If money is withdrawn to use for non-medical expenses, you will pay 20% penalty in addition to tax prior to age 65. After 65, you would pay tax but no penalty, which means the same tax treatment as IRA.

See: https://www.thebalance.com/hsa-vs-ira-you-might-be-surprised-2388481.

Dead people.

 

[Montecfo]

One cool thing you can do with HSA bank is invest in equities via a linked TD Ameritrade account. Been doing that for a few years. Just use the account for investment against future medical costs.

Invest in medical stocks and you can have some nice growth and medical inflation protection as well.