does contributing to HSA make sense once retired?

[Mulligan]

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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[Lcountz]

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!!!

 

[Mulligan]

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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[audreyh1]

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.