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10-13-2007, 07:27 AM
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#1
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Thinks s/he gets paid by the post
Join Date: Oct 2002
Location: Chattanooga
Posts: 3,200
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HSA Questions
Just curious how many here take advantage of HSA ? They look like no brainers to me and I plan to set one up before the end of the year. I would like to hear any pros, cons or just observations concerning HSA. Who offers the best HSA with investing choice flexiability, etc., etc.?
Aprreciate any and all replies.
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10-13-2007, 08:21 AM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2006
Posts: 12,880
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Recommended. Do some searches on this forum.
__________________
Al
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10-13-2007, 09:33 AM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2007
Posts: 12,823
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Quote:
Originally Posted by TromboneAl
Recommended. Do some searches on this forum.
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Yes, search here and on bogleheads site for recommendations.
Guide to the Vanguard Diehards Forums
I have an HSA and it is a minimal hassle for the tax savings.
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10-13-2007, 11:59 AM
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#4
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Full time employment: Posting here.
Join Date: Sep 2007
Location: mpls, mn
Posts: 607
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If you are eligible, an HSA is a no brainer. The money you put in is tax deductible, It grows tax deffered, any money you don't use is rolled over to the next year, and after age 65 you can take out the money for any purpose tax free. At least this is my understanding. I make the max. contribution every year and don't plan on using any if possible.
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10-13-2007, 01:58 PM
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#5
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Thinks s/he gets paid by the post
Join Date: Mar 2006
Location: Houston
Posts: 4,337
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I'm in one and I max out the contribution every year. I do pay my medical bills with the money in it but that's only about 1/4 of what I put into it. The "payment" is with tax free money so I figure it's probably worth more to me now than after retirement when I like to think I'll be in a lower tax rate.
__________________
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
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10-13-2007, 04:03 PM
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#6
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Recycles dryer sheets
Join Date: Oct 2005
Posts: 325
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I use HSA Bank as they can invest your money with TD Ameritrade. Better than earning a couple percent interest.
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10-13-2007, 07:02 PM
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#7
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 2,450
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Curious why somebody would contribute to one of these in FIRE vs. just a high deductible plan? Maybe it was T-Al that looked at the costs...After you FIRE, why would there be a need to be putting money in into a tax deductible account since you are no longer saving but rather taking income from your portfolio?
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10-13-2007, 07:06 PM
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#8
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Moderator Emeritus
Join Date: Feb 2004
Location: minnesota
Posts: 13,228
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If you don't use up all the money each year, its growth is tax deferred and if you use it for allowed health care costs, no tax will be due on the growth at all.
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No more lawyer stuff, no more political stuff, so no more CYA
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10-13-2007, 07:13 PM
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#9
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 2,450
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ok....I see...makes more sense...thanks...
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10-13-2007, 07:14 PM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2007
Posts: 12,823
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Quote:
Originally Posted by maddythebeagle
Curious why somebody would contribute to one of these in FIRE vs. just a high deductible plan? Maybe it was T-Al that looked at the costs...After you FIRE, why would there be a need to be putting money in into a tax deductible account since you are no longer saving but rather taking income from your portfolio?
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I have a high deductible health care plan provided by my former employer. I use the HSA to pay for deductibles and co-pays, providing a tax deduction.
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10-14-2007, 07:26 AM
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#11
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Thinks s/he gets paid by the post
Join Date: Jan 2006
Posts: 4,172
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Pro: One of few (perhaps only?)vehicles where you get both upfront deduction and nontaxable withdrawals (for qualifed medical expenses) as well as tax sheltered growth.
Deduction of contributions even tho you don't itemize. Some use it solely for the tax sheltered growth, paying medical expenses from outside the HSA. Apparently you can save the old medical bills since starting HSA and then, years later, use them as justification to withdraw funds from the HSA. Extra contributions allowed for older folks (>55  yrs old)
Con: Expenses can be high percentage of small accounts so need to shop around carefully. Must be used in conjunction w/ high deductible health plan so need to make sure the tax benefits of HSA outweigh the higher expenses of that HDHP
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10-14-2007, 10:29 AM
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#12
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2006
Posts: 12,880
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Quote:
After you FIRE, why would there be a need to be putting money in into a tax deductible account since you are no longer saving but rather taking income from your portfolio?
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Good point, but here's why:
1. It grows (compounds) tax free
2. Although my tax and tax rate at this point are low, I still save by deducting my HSA contributions each year. At the 15% tax rate, I save $427 in taxes for each annual $2850 investment.
__________________
Al
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10-14-2007, 10:34 AM
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#13
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Moderator Emeritus
Join Date: Dec 2005
Posts: 10,123
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This year, MegaCorp offers one. We are going to contribute to the HSA and DW's FSA with an eye to taking the money out of the FSA first and keeping as much as possible in the HSA.
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