HSA

If you're able to choose a qualifying high deductible health plan, you can take advantage of the triple tax benefit of an HSA.

If you're able to choose a qualifying high deductible health plan, you can take advantage of the triple tax benefit of an HSA.

Can you explain the triple tax benefit?

If you're able to choose a qualifying high deductible health plan, you can take advantage of the triple tax benefit of an HSA.

Can you explain the triple tax benefit?

Sure. Contributions to an HSA are tax deductible. HSA assets grow tax free. And qualified withdrawals are also tax free. For purposes of comparison, traditional IRAs have tax deductible contributions and tax-free growth and Roth IRAs have tax-free growth and tax-free qualified withdrawals.

@Aaron G. Thanks!

Yes, HSA are great for this reason!

@Aaron it's definitely one of the strongest wealth building tools we have. I am using my HSA dollars to invest in real estate projects. Returns have been good. My goal is to accumulate enough to buy an investment property outright. The limit on contributions make that a long term goal but I'm here for it. I also learned that there's no deadline on claims. I pay for qualified medical expenses out of pocket and stock pile the receipts. I plan to use them at retirement age to take tax free distributions. Can you tell how excited I am about HSAs? LOL!

@Aaron it's definitely one of the strongest wealth building tools we have. I am using my HSA dollars to invest in real estate projects. Returns have been good. My goal is to accumulate enough to buy an investment property outright. The limit on contributions make that a long term goal but I'm here for it. I also learned that there's no deadline on claims. I pay for qualified medical expenses out of pocket and stock pile the receipts. I plan to use them at retirement age to take tax free distributions. Can you tell how excited I am about HSAs? LOL!

@Shaina P., I'm also stockpiling receipts for qualified expenses. However, there is an argument to be made here to cover expenses now rather than later because of the record keeping and burden of proof. Aside from that, I also love the premium pass through. And when Fidelity finally offered an HSA, I almost immediately moved there.

@Aaron thanks for that article! I'm the only person I know that stockpiles my receipts that way. Feels good to get that validation. I keep a scan of each receipt in my Dropbox but hadn't thought about keeping the details in a spreadsheet. I'll start that project. I'm a record keeper by trade so I'm not daunted by needing to validate the claims later down the line. If they want to go through decades of tax filings, I'm locked and loaded. I recently moved my assets to Fidelity too. My employer contracts with HSA Bank. HSA Bank recently implemented a $1,000 cash requirement. I immediately started to search for a new Custodian. As you know, Fidelity doesn't have a cash requirement and they manage my 401K so it was an easy decision to go with them. It's a pain to move my contributions every pay day but I refuse to let my HSA dollars sit idle.

The federal government also establishes employee HSAs with HSABank. If it weren't for the premium pass through having to go there, I'd be done with them. My payroll allotments for my HSA go directly to Fidelity.

I had an HSA with my employer, but due to budget cuts they had to let go of some of our benefits and that was one. Sad.

I had an HSA with my employer, but due to budget cuts they had to let go of some of our benefits and that was one. Sad.

@Amanda R., as long as you qualify for an HSA, you should still be able to continue using and contributing to an HSA even without employer sponsorship. You may not get employer contributions or premium passthrough contributions, but you still get all the tax advantages.

You can buy real estate with an HSA?

You can buy real estate with an HSA?

You can potentially invest in anything that your HSA provider offers for investments. If you're looking for exposure to real estate, for example, you could consider investing in REITs, assuming your provider offers them.

You can buy real estate with an HSA?

@"Mary Ellen" Yes. I use my HSA contributions in real estate projects right now. I'm a private lender for a local builder but hoping to connect with flippers. You must find a custodian that specifically handles 'Self Directed HSAs'. Many HSA custodians offer self-directed investments but most of them are referring to you choosing your own stock investments. I've only found 2 or 3 that are truly self-directed - meaning you can invest your HSA contributions in almost anything…a new business venture, real estate and other incoming producing assets. I use AdvantaIRA because they were already hooked up with the local builder I invest with. Search "self directed hsa real estate" on YouTube.

I love my HSA.

Some argue that hsa's are even better for financial independence than 401ks. What do you all think?

Some argue that hsa's are even better for financial independence than 401ks. What do you all think?

@Anna H., an exact answer to this question depends upon your specific situation and how you would define "better." The features of a 401k (or 403b) often depend upon your employer and plan administrator. Does your employer offer good benefits like matching and a low cost program? Does the administrator offer good investment options at low costs? Similarly, employers and plan administrators affect the HSA. Does your employer offer good health insurance options that qualify subscribers for an HSA and do those options offer a premium passthrough? Does the HSA administrator offer good investment options at low costs? The plan administrator isn't as big of an issue for the HSA as it is for the 401k or 403b because you can change where your HSA is. One definite advantage of a 401k or 403b over HSAs is the annual contribution limit. The HSA has a big advantage in that it offers a triple tax advantage, assuming the proceeds are used to pay for qualified medical expenses. But even if you don't use the HSA funds for medical expenses, using it for qualified non-medical expenses would be similar to using funds for qualified expenses from a traditional 401k, 403b, or IRA.

sounds like a great research

good tips

Very good ideas. I love the idea of the self directed HSA

Me too

I've never had an HSA account. Who is good

@"Mary Ellen" Yes. I use my HSA contributions in real estate projects right now. I'm a private lender for a local builder but hoping to connect with flippers. You must find a custodian that specifically handles 'Self Directed HSAs'. Many HSA custodians offer self-directed investments but most of them are referring to you choosing your own stock investments. I've only found 2 or 3 that are truly self-directed - meaning you can invest your HSA contributions in almost anything…a new business venture, real estate and other incoming producing assets. I use AdvantaIRA because they were already hooked up with the local builder I invest with. Search "self directed hsa real estate" on YouTube.

wow I didn't even know that was a possibility
.

Such an advantageous account to have but only realistic if you don’t have a lot of current health issues and no reoccurring prescriptions. Honestly saving through this account is so paramount because when we all get older this will be a lifesaver. Even currently with the random contracting of Covid and potentially having long term Covid. Savings from this account could mitigate costs.

I am considering HSA since I have two children, but i was wondering if I should go through my job or go through an independent company (i guess that's the term). I wont be able to go through my job until I have a life event and I dont know if my job puts anything towards it.