Can You Have Too Much Money in an HSA?

Can You Have Too Much Money in an HSA?

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[Retiredmco]

I agree with 1st answer, "NO YOU CANT" LOL. Medical expenses are ONLY gonna increase over time. I want definitely over 100K preferably 200K in mine at end of this decade. I want the problem of having too much in my HSA.

[cutehumor]

I got 120k in my hsa invested in total stock market. I spend it as I get healthcare bills. I’m aware it will be taxed to death when my wife and I die off. I plan on spending it down when I’m age 65 as a traditional Ira. I rather do that than risk the greedy government getting 40 percent of my hsa in taxes

[anthonysantos]

Usually no, but i would argue once you reach 6 figures in an HSA you should understand that if a non spouse inherits your HSA that they will be required to cash it out and pay the taxes the year of your death. With an inherited ira a non spouse can cash it out each year over a 10 year period to help keep you in a lower tax bracket.

[briankelly]

I am so sad to not have an HSA anymore 😢

[andrewpulsipher]

My HSA receives insurance claims and keeps them on file which I can use to reimburse myself years later. I don't need to hold onto my receipts. Healthequity rocks.

[shawnjackson]

Backup Traditional IRA for age 65+! Only downside is if you do that is its taxed at ordinary income. But you SHOULD have it figured out IF you're going to overfund it well before you get to that point!

[enigmathegrayman]

I blame my good health for having too much money in my HSA

[MarkTimothyAdams]

Can please consider Healthcare cost impacts based on AI / Robotic Surgeries and healthcare maintenance cost, which in my opinion, should decrease.

[greg_]

It's the first thing I max out every year. Top that baby up.

[BigPapiLoc]

The fact that you need to be in an HDHP to get an HSA makes me sick. If we are too inept as a country to not adopt a single payer or universal coverage healthcare system when every other first world country has one, why can't I not at least get an HSA to help with deductibles or copay? I am enrolled in an FSA but it's hardly comparable. Pisses me off so much.

[joelcorley]

I have 6 figures in my HSA and I'm 59 and FIREd. I'm not there yet, but I think there can come a point where continuing to fund an HSA might not make too much sense. Why? Because HSAs are terrible inheritance vehicles. If I don't exhaust my HSA, my heirs will be forced to pay ordinary income taxes on the balance all in one lump sum. That's because there's no such thing as an inherited HSA account, so the account must be liquidated all at once after you die. And if the account is large, this can push your heirs into a much higher tax bracket.

I'm not to the point where that really matters yet, but I only contributed to an HSA for a little over a decade and I've accumulated enough money in the account that it's very likely I'll be able to pay for all my future deductibles, copays and future eligible Medicare premiums just from earnings in the account. But I'm not going to do that because of this fear that my kids will have to take a big tax hit if I do. Instead in the next year or two I'm going to start taking distributions based on my previous medical expenses. This should help me with ACA subsidies, but even then I have receipts that total less than half of the HSA balance. If I continue withdrawing funds to cover qualifying expenses, this may eventually deplete the account during retirement before I pass. I'm thinking this might be a reasonable use for the account.

[gosman]

HSAs just started to come out when I retired. Sure could use them now for all of my deductible expenses.

[hm]

If a charitable organization is named as the beneficiary, does the full amount of the HSA account go to the charity?
Or does the deceased pay tax on the HSA account balance first?
(i’m seeing conflicting information on the Internet… Shocker, right?)

[TheKelsonmorris]

What if you are a superhuman and never get sick?