Is It Just Me or Do HSAs Suck?

[Michael_00005]

It all depends on the circumstances. If you are still working and can max out HSA contributions it can be a pretty epic investment. We have a 2 K minimum to avoid fees, and after 7 years it's up to about 18K, been maxing it out for 3 years.

I'd list it as the 2nd best investment for a working person, right after employer matching contributions. But it's going to depend on how it's set up, and how much you can contribute.

[sarahen]

The one good part is that you get higher interest rates with higher balances vs regular checking

[RealPerson]

This may be worth a try?

http://www.millionaireeducator.com/2017 ... oblem.html

[classical_Liberal]

Am I reading the tax law correctly? One can contribute the maximum to an HSA as long as one has established HSA eligible insurance by December 1st of that year?

I ask because I will have employer sponsored insurance (not HSA) until Sept/Oct, then I plan to ride out the 60 days I have to backdate COBRA if need be (free insurance). After that, I was considering just risking the last month or two of the year and taking out HSA compatible insurance Jan 1. However, If I could contribute a full 3.5K in 2019 with only one or two months of coverage, I come out ahead, plus get the insurance.

[TopHatFox]

Yup, they kinda suck. It'd be a lot better if it was just another account at my discount broker, but no. Instead there's an HSA administrator (who doesn't hold the money) and a bank (where the money is). Want to invest outside the bank? Another company enters the mix. And they all get a slice.

But they're still popular because of employer contributions and the tax advantages. AFAIK, it's the only way to avoid FICA tax on earnings.

Once I quit working (and the employer contributions cease), I'll probably move it to a local credit union so I'm not whacked with fees.

Wait, you can avoid FICA taxes by using an HSA? How?

[EdithKeeler]

Wait, you can avoid FICA taxes by using an HSA? How?

If the HSA is offered thru your employer, your contributions go in pre-tax, meaning no tax, FICA, etc is paid on the amount you contribute.

I love my HSA. I’ve got about $30k or so in there. It’s a great extra retirement $$ vehicle.

[thebbqguy]

I was skeptical about mine at first, but my employer contributes $1,000 annually into mine. The FICA advantage is something I overlooked originally. I currently contribute the maximum to mine and the maximum with catch up in my 401k. As someone who is having more healthcare expenses in my 50's I see it as a way to have access to cash for healthcare without the tax impact of using my 401k funds. My mom is 73 and the tax implications of accessing 401k money surprised her. I always go back to thinking that paying fees and tax is better than being broke.

[OTCW]

Lively HSA has no fees. You can invest every dollar of your HSA/don't have to keep anything in cash. Investments are made through TD Ameritrade. Limited number of investment choices, but they cover a wide spectrum of basic funds.