8 Replies to “Triple Threat: Health Savings Account (HSA)”

  1. Great advice, at 59 yrs old it doesn’t sound right for me since my spouses employer offers great healthcare insurance. I’m guessing this advice is good for anyone under 40?

    1. Thanks for your comment.

      Yes, you’re right that maybe older folks should seriously consider if a HDHP is right for them, since they are statistically more likely to incur medical expenses. That being said, if you’re a healthy 59 yr old and have little ongoing medical expenses, having lower premiums with a HDHP and having some cash saved up in your HSA for when a serious medical bill hits (or extra retirement $$$) might outweigh the cost of the HDHP’s higher deductibles.

      This being said, given that you can only sock away $3,550 per year for individuals in the HSA, it may take a few years to fully be able to cover your entire out of pocket expenses incurred if you do have a major medical bill pop up.

      It is also important to remember that virtually NO health plans have NO deductibles, so even with those more expensive non-HDHP could be on the hook to pay for deductibles, co-insurance, co-pays without an HSA – using your regular after tax income. While yes, you can ‘claim’ these medical expenses at tax time, you’ll find that you have to incur quite a whopping medical bill to exceed the standard deduction.

      1. Thanks for your timely reply. Does the rule still hold true, max out your 401k, Traditional and ROTH IRA savings first before considering other avenues for saving?

        1. Yes, definitely! We will outline this in an upcoming blog post. But, in general, if saving for retirement you should always take advantage of your employer’s 401k/403b fund first (especially if there’s a match), then max out your IRA, then consider funding an HSA, and lastly fund a regular taxable brokerage account.

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