HSA Contributions in the year I go on medicare

[walkinwood]

I turn 65 in September 2025 and want to verify my HSA contribution limits for next year.

Family contribution limit $8550
Individual Contribution Limit : $4300
Over 55 contribution : $1000/each

Since I will have a family HSA plan for the 1st 8 months (Jan to August), we should be able to contribute $(8500/12)x8 = $5666.67
DW should be able to contribute for the remaining 4 months at the individual rate : $(4300/12)x 4 = $1433.33

Do I have to pro-rate the added $1000/year too? In that case, I can contribute $666.67 and DW can contribute the whole $1000.

Do I have it right?

While I have your attention, does it make sense to have 2 individual plans for 2025, or is it easy enough to switch DW to an individual plan in September when I go on Medicare?

 

[audreyh1]

I think you have to pro rate the $1000 too.

 

[sengsational]

I prorated the whole thing. I always just looked at what the limit was, in total, so it didn't occur to me I would do two proration calculations and add them together.

 

[audreyh1]

I also prorated the total for the 9 months before I started Medicare. We also had individual insurance policies so the transition was easy for is as we always used the individual numbers and didn’t impact the other’s policy.

 

[cathy63]

Do I have to pro-rate the added $1000/year too? In that case, I can contribute $666.67 and DW can contribute the whole $1000.

While I have your attention, does it make sense to have 2 individual plans for 2025, or is it easy enough to switch DW to an individual plan in September when I go on Medicare?

Yes, you have to pro-rate the $1000.

If you have two individual plans then your spouse gets the slightly higher individual contribution for the whole year. How easy it is to switch probably depends on where you're getting your insurance. If you are using a specific state's ACA exchange vs healthcare.gov vs employer/retiree coverage you could have a different experience with each one.

 

[Flieger]

I will have been covered by HSA eligible plan through November of this year. Does that mean I can contribute 11/12's to HSA? I calculate that as 11/12's of $10,300 or $9,441 including mine and DW's 55+ contribution. Does this sound right?

Flieger

 

[easysurfer]

Looks like this won't be apply to me as I made my last HSA contribution this month. Wasn't my choice but no more HSA Eligible plans that I can choose from on ACA. In a way, that's a blessing in disguise as less things to think about .

 

[walkinwood]

I will have been covered by HSA eligible plan through November of this year. Does that mean I can contribute 11/12's to HSA? I calculate that as 11/12's of $10,300 or $9,441 including mine and DW's 55+ contribution. Does this sound right?

Flieger

That's how I would calculate it.

 

[Kings over Queens]

I will have been covered by HSA eligible plan through November of this year. Does that mean I can contribute 11/12's to HSA? I calculate that as 11/12's of $10,300 or $9,441 including mine and DW's 55+ contribution. Does this sound right?

Flieger

Did I read this correctly, I can fund a $1,000 catch up for both me and my wife provided we are +55?

 

[Kings over Queens]

Answering my own question, yes, I can. It looks like I can even use her IRA for a one time funding of this $1,000, but it also looks like she needs her own account.

 

[audreyh1]

Answering my own question, yes, I can. It looks like I can even use her IRA for a one time funding of this $1,000, but it also looks like she needs her own account.

That’s right. She must have her own HSA account to use the $1000 55+ catch up contribution.

Also, I assume she also has a change in insurance so only 11 months HSA compatible plan this year? So it’s 11/12 * $1000.

Why would you use her IRA to fund your wife’s IRA? You lose the tax deduction if it comes from tax-deferred funds.

 

[cathy63]

I will have been covered by HSA eligible plan through November of this year. Does that mean I can contribute 11/12's to HSA? I calculate that as 11/12's of $10,300 or $9,441 including mine and DW's 55+ contribution. Does this sound right?

Flieger

Are you and your DW both covered by the HDHP for only 11/12ths of the year? E.g. if she stayed on the HDHP plan but you went on Medicare December 1, then she gets to put her full $1K for the year into her own HSA plus she can put 1/12 of $4150 in for December.

 

[Kings over Queens]

That’s right. She must have her own HSA account to use the $1000 55+ catch up contribution.

Also, I assume she also has a change in insurance so only 11 months HSA compatible plan this year? So it’s 11/12 * $1000.

Why would you use her IRA to fund your wife’s IRA? You lose the tax deduction if it comes from tax-deferred funds.

No, we're covered under the same plan. I just never realized she would get her own 1k catch up contribution. I realized after hitting send using the IRA makes no sense from a tax perspective. While technically correct, I think, my fingers engaged before my brain.

I missed 2 or 3 years of her catch up provision. :kicksrocks:

 

[Flieger]

Are you and your DW both covered by the HDHP for only 11/12ths of the year? E.g. if she stayed on the HDHP plan but you went on Medicare December 1, then she gets to put her full $1K for the year into her own HSA plus she can put 1/12 of $4150 in for December.

No. We both will have one month without coverage.

Flieger

 

[audreyh1]

No, we're covered under the same plan. I just never realized she would get her own 1k catch up contribution. I realized after hitting send using the IRA makes no sense from a tax perspective. While technically correct, I think, my fingers engaged before my brain.

I missed 2 or 3 years of her catch up provision. :kicksrocks:

Sorry I see it’s Flieger who is changing plans in December. Ignore my 11/12 reference.

 

[walkinwood]

Are you and your DW both covered by the HDHP for only 11/12ths of the year? E.g. if she stayed on the HDHP plan but you went on Medicare December 1, then she gets to put her full $1K for the year into her own HSA plus she can put 1/12 of $4150 in for December.

That's new information to me. I thought we had to pro-rate the $1000 too.

Would you point me to the source of that statement please?

My situation is that I have a high deductible plan for 2025 till I go on Medicare in September (8 months) while DW stays on a high-deductible plan for the whole year.

 

[audreyh1]

That's new information to me. I thought we had to pro-rate the $1000 too.

Would you point me to the source of that statement please?

My situation is that I have a high deductible plan for 2025 till I go on Medicare in September (8 months) while DW stays on a high-deductible plan for the whole year.

That is if DW is on the HDHP plan for the full year. She gets the full $1000 catch up contribution. She gets to continue to contribute to an HSA, but it should be to her own HSA account.

I think I got confused earlier and thought DW was also stopping.

 

[cathy63]

That's new information to me. I thought we had to pro-rate the $1000 too.

Would you point me to the source of that statement please?

My situation is that I have a high deductible plan for 2025 till I go on Medicare in September (8 months) while DW stays on a high-deductible plan for the whole year.

HSA catch-ups are per person. You have to pro-rate the $1K and can put 8/12 of it in your own HSA, your DW gets to put her entire $1K in her own HSA (assuming she's over age 55). That's what I was explaining to Flieger, because it wasn't clear that both of them would be changing insurance on Dec 1.

In your case, for the 8 months that both of you are on a family HDHP, you can also put 8/12 of the family max in either HSA. Then for the 4 months that she's on an individual HDHP, she can put 4/12 of the individual max in her own HSA. For 2025, the individual max is more than half the family max, so she gets a few extra $ in this deal.