new to HSAs

[moneybags]

I Just enrolled in an HSA for this year. After doing some reading, I'm considering using this as a retirement account as opposed to taking out the money this year. Does anyone else here do this? From what I understand, you can withdraw money at anytime for prior expenses. I need to figure it out before I start taking out the money this year.

[bjl584]

I've never had an HSA, but I thought that you had to use the money in it. Use it or lose it? I may be wrong, as I've said, I've never used one or looked into them.

But,
Do you already have a retirement account? Why use a HSA?

[cypher1]

There were a couple really good posts on this subject a few months ago. I'm not an expert on the investment side, but basically its another tax deductible contribution. I think the max contribution per individual is 3050 annually. When you leave the company, it goes with you. Use it or lose it by the end of the year is Flexible Spending Account (FSA). If you're pretty healthy, and hardly go to the doctors annually, a High Deductible Health Plan (HDHP) with HSA can work to your advantage for both health savings cost and lowering tax bracket. Others on here can better explain the advantages.

[cypher1]

Here's one of them:

http://www.savingadvice.com/forums/personal-finance/55665-hsa-advice.html

[moneybags]

I've never had an HSA, but I thought that you had to use the money in it. Use it or lose it? I may be wrong, as I've said, I've never used one or looked into them.

But,
Do you already have a retirement account? Why use a HSA?

This is actually through husband's work. He also has a 401K, which we max out. My dilemna is take the tax break now or later via the HSA.

[bjl584]

This is actually through husband's work. He also has a 401K, which we max out. My dilemna is take the tax break now or later via the HSA.

Do you have a ROTH? That may be a better option for you.

[SnoopyCool]

I've never had an HSA, but I thought that you had to use the money in it. Use it or lose it? I may be wrong, as I've said, I've never used one or looked into them.

They roll over from year to year.

[muexm]

My family is signed up for an HSA this year and I love it so far. We are actually saving around $400 a month in medical premiums. If you are fairly healthy and have enough money in savings to cover the deductible in case of a medical emergency,I would recommend it. You do have to pay full cost for pescriptions so take advantage of discount programs like mail-order-pharmacy.

[MonkeyMama]

Do you have a ROTH? That may be a better option for you.

Agreed.

An HSA is a good retirement tool for the wealthy/upper middle class. Higher fees and limited investment choices may be worth it for the tax break, for higher-worth individuals.

For most people, they'd be better off to max out other retirement vehicles, before building long-term balances in a HSA.

I am personally eligible for a HSA, but do not use one at all, due to my own tax situation. (We itemize, our premiums are more than 7.5% income, and so all of our medical expenses are 100% deductible for Fed & state. No hoops to jump through. Plus, our state doesn't recognize HSAs and is a tax nightmare - would lose state deduction for medical expenses - double bookkeeping. That said, I would contribute to the HSA if all retirement was maxed and had more cash to save).

If all your other retirement savings options are mexed out, 529 plans, etc., etc., then go for it.