Anyone retire without a hsa

[livingalmostlarge]

We don't have an HSA. Never had N option till this year and didn't take it but will next year since employer switched providers as well.

But has anyone retired without an HSA? Everyone talks about the HSA but if you never had a HSA or hdhp but we're covered by employer provided coverage then there is no pool of tax free money for medical. What did you do?

 

[SecondCor521]

I retired without one.

I had an ACA Silver plan with CSRs for the first few years.

It then dawned on me that I didn't use that much health care in a typical year.

So I switched to an ACA Bronze plan which was HSA eligible and started contributing to the HSA from my taxable assets.

I pay OOP for everything and keep all my medical receipts. I have a spreadsheet telling me how much to contribute to my HSA so I can pay for all my eligible medical expenses and my Medicare premiums and drain it by about age 85. It's a moving target, but I'll probably end up contributing the individual maximum (somewhat under $4K per year) for about a decade or a bit more.

HSAs are popular with the cool kids. I'm convinced they save me on taxes, so that's why I have one. I'm single and don't like the way HSAs are taxed on death for non-spouse beneficiaries, so that's why I'm trying to drain mine by about 85.

 

[Dtail]

No HSA here. Medical is just another budgeted expense.

 

[Texas Proud]

No HSA here. Medical is just another budgeted expense.

+1, except not really budgeted as things happen that are not expected...

 

[Lewis Clark]

Neither my wife nor I ever had an opportunity to have an HSA.

We get our medical insurance as military retirees.

 

[street]

Non here either.

 

[GhostofTomJoad]

Nope, never had an HSA. Retired now, I guess that disqualifies me.

 

[ownyourfuture]

Not sure if this will be helpful, but here goes.
I retired without an employer-sponsored HSA @ age 53 in June 2015.
I'm pretty sure the employer offered one, but since we had really good healthcare insurance (only small co-pays) & I was single, I never enrolled.

Since my employer didn't provide healthcare insurance after retirement, & I hadn't educated myself regarding the affordable care act, I chose COBRA coverage for 18 months. If memory serves, that was $500.00 per month through 2015, & $550.00 in 2016.

Shortly before the end of 2016, I got signed up with a high deductible ACA plan for 2017 through my state.

Since I now had a qualified HD plan, I opened an HSA @ HSA Bank.
Big mistake. As soon as Fidelity began accepting HSA accounts, I transferred.

The HSA has turned out to be invaluable to me. For 2024, I can contribute up to $5,150
It’s tax deductible, you don't have to use it or lose it, & as long it’s a qualified medical expense, the distributions aren't taxable.

This could vary by state, but the only downside to a HD plan like I have, is that even if the annual deductible has been met, there's zero coverage for Dental/Vision. The upside is that there’s no penalty for using HSA funds to pay for those.

If you decide to open one of these, there's several other threads with all the additional details.

 

[disneysteve]

I had an HSA plan briefly, one year I think, about 8 or 9 years ago. There's only 2 or 3 thousand in the account, so basically me.


As you know, for the past 16 months we've been on COBRA and starting 1/1/24 we'll be on an ACA plan. Any OOP expenses will come from our savings and what income I still earn.

 

[Dash man]

We never had an HSA either. Just paid the bills like most people. This year we’ll actually be able to deduct some medical expenses.

 

[badatmath]

I was never eligible for one.

 

[38Chevy454]

None here either. Did have the pretax sec 125 account for medical when working.

 

[cyber888]

None for me. Never had one.

 

[Sunset]

Never had one.

Just pay bills that insurance didn't cover , now pay for Medicare from regular money account.

 

[audreyh1]

The advantage is tax free savings for future medical expenses, but the stars have to align to qualify. If your employer didn’t offer one then you can’t do much about it. If you retired before Medicare age you probably had a chance to set one up but had to pick a compatible insurance plan. If company retiree benefits don’t support HSA plans then you are also out of luck.

 

[bada bing]

I have one and I fully participated for about 12 years. But I've never drawn a penny out yet. I've been banking qualified medical bill receipts and have the balance about 1/2 covered now. JMO but its just another tax advantaged savings account. People tie it mentally closer to ongoing medical expenses than it needs to be. As long as you'll eventually get enough qualified expenses - and almost all of us will - it can be just another tax free account balance akin to a Roth balance.

And if you don't have one, it doesn't mean much other than you probably could have saved some taxes on your lifetime medical expenses. No big deal.

 

[big-papa]

Of all the employers I had over a ~40 year career, only my last one had a medical plan that was HDHP and HSA-eligible. Before I joined this employer I looked at prior year healthcare costs with previous employer's insurance and compared with new employer's with the assumption that I wouldn't invest the HSA but would pay expenses ongoing.

For us it was almost a perfect wash when comparing total cost, including premiums.

The benefit for us came with investing the HSA dollars instead, as others have noted. While I've saved all of the receipts, it's highly doubtful I'll go back and use the HSA to reimburse myself after the fact. There will always be future medical expenses, but the current plan is to just reimburse for medicare premiums once that starts. That should drain the account somewhere in our late 70's/early 80's, depending on what the stock market does in the intervening years.

I retired in June of this year and stayed on COBRA through December, so we were able to max out this year's HSA contribution. When it came time to choose an ACA plan for 2024, only 2 plans were HSA compatible. One, even with subsidies, was more expensive than COBRA. The other one with reasonable premiums had an awful network.
Net result is that we won't be contributing to our HSA in 2024. We'll look at it again for 2025.

For us, having an HSA eligible plan is more of a "nice to have" than anything else. When we were choosing an ACA plan, there were other considerations much higher on the list than that.

Cheers.

 

[Ronstar]

Don't know what an HSA is, so I probably don't have one.

 

[Alan]

I had an FSA while working but as soon as I retired medical expenses shot up because the retiree plan was much more expensive but not eligible for an HSA, plus the premiums were now being paid with after tax dollars.

 

[Lakedog]

Didn't have an HSA before retiring but started one after, primarily for the tax benefit. I contributed for around 12 years prior to medicare but haven't spent any of it yet. The HSA balance has grown nicely and is currently over 3 times the amount contributed due to always being invested in equities. I haven't decided as to when to start spending from the HSA.

 

[ShokWaveRider]

No HSA here, ACA till Medicare worked great for us.

 

[rk911]

+1, except not really budgeted as things happen that are not expected...

+2 here. We were both local govt. (me) and state govt (my wife) workers. As such we had good retirement health care. I stayed on my employer's health care plan but had to pay the single-person premium, about $400 p/m. My wife had 30+ years with the state govt. She stayed on her health plan...medical, vision and dental at $0 cost to her. When I hit 65 my employer coverage ended and I transitioned to Medicare (Plan F ). Donna also transitioned to Medicare (Plan F ) and she pays a small monthly premium for dental insurance.

 

[Midpack]

I had an HSA, but I deliberately spent all of it on any/all legit medical expenses including premiums from 2011 thru 2020, because it was earning almost no yield sitting there (HealthEquity). So we haven't had any HSA funds and won't again.

 

[MarieIG]

We retired without, and never had, HSAs. DH has been retired four years today and I will be retired two years the end of this month.

 

[tmitchell]

I went with an HSA 2 years ago when I retired, and I'm still on the fence as to whether it's worth it.

In addiction to the $500/mo premium (it's high because I wanted to keep my PCP who only takes Blue Shield), I seem to be spending about $3k/yr on medical. So that's about $9k/yr as a single person, which makes me think this is really a wash for tax benefit, etc.

I could also go with a gold plan, which I'm considering. The premium is only $300/mo and has no deductible. So in addition to saving a couple grand I don't have to worry about receipts etc. I'm in the 12% tax bracket so the tax savings is peanuts. I may have talked myself out of continuing with an HSA.