Anyone retire without a hsa

[Willers]

We retired without one, but we've always had an HSA ACA plan in retirement so we now have on that has about $100K in it. We'll start burning it off when we both hit Medicare ages.

 

[easysurfer]

I use my HSA for those qualified dental and vision expenses. Hopefully, I'll have enough there still to last when I'm not longer HSA eligible once I hit Medicare age.

 

[rodi]

Didn't have HSA till I retired and went on an ACA HDHP.

 

[pacergal]

Never had an HSA, but later in our careers, employer offered FSA, with a "use it or lose it" every year. I monitored our medical expenses and knew approx. what we spent OOP, so we had a bit less than that taken from our paychecks and put in the FSA each year.
Only one year did I need to go get a new pair of glasses quickly before Dec 31!

 

[Dean56]

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.

OP, how old are you? There are age limits to contribute funds to a HSA.

I didn't have a HSA when I retired. This year I opened a HSA account with Fidelity. I'm using it as a tax advantaged investing account. Similar to a ROTH. I can deposit $4,850 each year until I'm age 65. I am investing the money in stocks.

 

[PaunchyPirate]

I’m 61. I have never had an HSA. Mostly because I never researched the advantages of them when I was working. I probably should have set one up while working (the option was there). My first 5 years on ACA after retirement, I went with a non-HDHP. But I’ve decided to test the waters in 2024 with an HDHP and HSA. I kind of needed the tax deduction to lower my income a bit for ACA subsidy purposes.

 

[Exchme]

We have one, but for some bad reason, went several years paying much more for the company's low deductible plan than the HDHP + HSA that would have been possible. Dumb decision to avoid it for several years, especially since those were very high tax years for us. Between deductibles, dental, COBRA, and future Medicare costs, it would have be easy to have taken care of a six figure HSA balance.

 

[F.I.R.E User]

I never qualified for HSA.

 

[SecondCor521]

Another nice feature of an HSA is the (somewhat limited) ability to adjust AGI after 12/31.

I have a Fidelity HSA and my 2% cash back Visa rewards are deposited in there, so I get a few hundred dollars of contributions that way.

I got my AGI dialed to $26 under the tax cliff I was aiming for last week.

This week, I messed up by giving away too much money to my kids and overdrew my checking account by a few hundred. Whoops.

But I can sell some stock today to fix my overdraft in the next day or two (bank doesn't care, they're probably advancing me off my credit card so I'll pay a few bucks in interest).

But that bumps my AGI by more than $26, so I'm going over my cliff.

No big deal. I just wait until February, do my taxes, see how far over my cliff I am, then contribute that much plus $1 to my HSA in February for 2023. As long as I have contribution headroom, and I do, this works.

I just about pay for the overdraft fee by tax optimizing that last $26.

 

[pb4uski]

My employer offered a HSA late in my career and we have them but I don't see them as particularly important to retiring... just a different arrow in the quiver.

 

[audreyh1]

Now that I think on it, I did retire without an HSA, but I was able to contribute to one during retirement.

 

[MichaelB]

Now that I think on it, I did retire without an HSA, but I was able to contribute to one during retirement.

Same with me.

My first HSA was with Shawnee HSA, who was an administrator and used Canopy Financial as custodian. Canopy execs were liars and thieves and stole $ millions. They were caught and the survivors are in jail. Investors took a bath. Most account holders were made whole on the original funds they deposited but not any investment gains.

 

[N02L84ER]

We retired without an HSA. While on the ACA plans, we were able to use HSA eligible plans 5 out of 13 years, so now we both have HSA dollars.

 

[SecondCor521]

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.

Could be a sort of big deal.

Medical expenses that you can run through an HSA could (easily) be $100K. Federal tax rate could be 25%. State tax rate could be 5%. HSA savings could therefore be $100K * (25% + 5%) = $30K.

Not bad for some paperwork hassle.

Less benefit to lower tax brackets and lower medical expenses, obviously.

 

[bada bing]

Could be a sort of big deal.

Medical expenses that you can run through an HSA could (easily) be $100K. Federal tax rate could be 25%. State tax rate could be 5%. HSA savings could therefore be $100K * (25% + 5%) = $30K.

Not bad for some paperwork hassle.

Less benefit to lower tax brackets and lower medical expenses, obviously.

An additional wrinkle is that HSA payroll deductions - but not direct contributions - are FICA exempt. It never mattered to me as the years I did payroll HSA deductions were all above the FICA cap by more than my HSA contribution, but it could for some situations. Payroll deductions will save 7.65% FICA if you gross under the cap, but the income will be missing from the eventual SS earnings record.

An additional wrinkle is that my employer gave $1000/yr into the HSA to encourage the HDHP option. I think that similar is available to a lot of mega-corp workers because employers save money on HDHP.

I put ~$45K in contributions into my HSA that saved 24% Fed bracket with a little bit in the 32% bracket. I also am saving 15% capital gains tax on ~$55K in gains so far.

 

[RetiredHappy]

No HSA. I have been paying full freight off exchange private individual insurance since I was 54 (retired at 53). No ACA, no subsidies. We just need to set aside a budget to pay for it. My premium is about $16K a year (age 61). Last year my health care cost was about $24K a year because I hit my max out of pocket due to an accident. I cannot wait for Medicare to kick in. My husband is on Medicare and his total cost per year is about $10K a year due to expensive drugs, and he is on Plan F.

 

[kgtest]

My buddy is 42 and retired. I was chatting with his girlfriend recently and she said "he can tell you where the cheapest EKG is in the country". I laughed. She responds "I'm not joking!"

 

[G-Man]

I currently have an HSA and will continue to have one with the retiree health care plan once I retire. I have been maxing out my HSA for the past 3 years and will continue to do so until age 65.

 

[Surewhitey]

We've been doing them for years and have ~$65k built up. We also are in the 24% bracket and add in the 7.65% for Medicare and SS, no brainer. We'll eventually roll it over to Fidelity and keep it invested.

I recently heard that you can use it for assisted care too. Haven't confirmed it yet, but it makes sense.

 

[Lron58]

No HSA

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?

We retired without one. Medical expenses are just that an expense like any other to be budgeted for (however, I do budget big just in case.)

 

[Gumby]

Never had an HSA. We have gold plated retiree health insurance from my last employer. Well, technically, as of yesterday, I now have a Medicare Advantage plan through my last employer. It has no premiums and my employer increases my pension to reimburse me for Medicare Part B premiums, including IRMAA if I should trigger it. The young wife is still on the regular retiree healthcare.

 

[JJpop]

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?

Most people don’t have an HSA.
It is a great investment opportunity because of the tax advantages but it has little effect on paying your actual medical bills. It is money being spent one way or another.
I would say almost everyone who is financially sound has some kind of health insurance. We are on Medicare and at ages 71 73 have still not used our HSA’s because of the tax free growth.

 

[orbops]

My wife and I had an HSA in 2023, and unfortunately had major medical bills, so we maxed out at $15K. I decided it was cheaper to enroll in a Marketplace Silver plan for 2024 with a max of $6.3K and $60/month instead of getting the $10.3K income deduction from the 2024 HSA contribution limit.

 

[DrRoy]

No HSA here. Medical is just another budgeted expense.

+2

 

[Safe Harbour]

Tax Account Said don't bother.

Tax Account Said don't bother. So I never did.