Why you should NOT have an HSA | The REAL truth about Health Savings Accounts

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[CharlotteIsabellaX]

Biggest lesson i learnt in 2023 in the stock market is that nobody knows what is going to happen next, so practice some humility and low a strategy with a long term edge.

[srconrad]

This is crazy. I can’t “like” this in good conscience. I just retired at 60 with a $60, 000+ HSA that I was pleased to learn will cover my COBRA premiums for the next 36 months. This is fantastic, all tax free. You say if you don’t do this, this, and this. Well do them! I invested in a stock index fund the entire time and maxed it out the entire time. Even if you don’t use it all for medical expenses, it turns into an IRA at 65. One of the best things I did was open an HSA as soon as I could and fully fund it.

[PBY]

My wife and I had an HSA for years which we always fully funded. (My company made some contribution to the HSA each year to encourage employees to get high-deductible health plans but those plans suited our needs anyway.) The HSA company sent us debit cards which we used for our portion of eligible health expenses so saving receipts wasn't that big of a deal for us. I know this does not take maximum advantage of the HSA, but it did provide us a way to make those health payments with tax-free money. For us, it was worth it.

[badabing]

Good video, but mistaken take on HSAs. It's an illogical, circular argument to not utilize an HSA because most people don't. HSA is the single best advantaged account *if* you actually use it, period. Most people don't utilize their other retirement saving opportunities to the full extent either, but that's no reason to not recommend them.

Another little perk you didn't mention is that HSA paycheck deductions are also FICA tax exempt. There is no other program that is FICA tax exempt. An additional possible perk is that many employers offer matching contributions or other incentives to get their employees into HDHPs. My former employer paid the difference in deductible into your HSA account for electing the HDHP, which was a no-loose situation.

I'm an example of a newly retired single guy who did fully utilize my HSA, pretty much from inception. This is my last year of contributions, I go on Medicare the end of this year. I have $140K in mine now. I also have about $60K in banked qualifying receipts and have no doubt I'll eventually have qualifying receipts for all of it. Remember that your out-of-pocket insurance premiums are qualifying expenses, including Medicare Part B, Part D and Medicare Advantage plan premiums (but not "Medigap" plan premiums) . Just that fact alone makes a HSA a no-brainer.

[atl]

I love my HSA. I’m maxing it. I’m saving my receipts. I’m investing the monies within my account primarily in 3 funds. 40% in a growth fund, 40% in a fund that tracks the S&P 500 and 20% in a target retirement fund. It’s working great. Love, love, love my HSA!

[dathat]

Physical receipts can fade over time, especially register receipts from retail stores. Tip - Scan all receipts (and back up the files). To keep it simple I do so once a year at tax time and keep a yearly summary. It also helps to keep all my medical expense receipts, physical or otherwise, in one location for when I eventually use them to withdraw from my HSA.

Not all HSA providers charge the same. Many have rather high fees. You can shop around and usually do a periodic trustee-to-trustee transfer from your employer-contracted HSA to a more fee-friendly provider while still working.

[chesterchambers]

Moving to the High-Deductable-Health-Plan reduced my premiums by about 2K per year. The deductible for 2 people is now about 5600, which is about 5000 more than it was before. Being able to put 10K into the HSA reduces my tax bill by about 3000. So the added cost is 5000 and the savings are about 2000 + 3000 = 5000. In summation, my healthcare is now free, and the money in the HSA will eventually be my long-term care insurance. Really hard to argue that that's not a great thing. Most of the critique revolves around people not knowing how to use the HSA. That's an argument for more education, not an argument in support of NOT having it.

[senddwight]

Yes it will make a difference!!! I’m 44 years old and plan to retire by 50. My HSA has grown to almost $50k from about $6k over the last 4 years (thanks to one lucky investment). Healthcare will be a huge expense in early retirement. I hope my HSA continues to grow to completely cover my and my wife’s healthcare expenses from the age of 50-70🙏🏾

[tracymiller]

I love my HSA. Started putting the max in each month while working full time after I divorced at 50 so when I retired at 64 had a sizeable chunk. Have a debit card with it so use it for all co-pays, higher priced dental procedures (tooth implant), vision/eyeglasses, etc. No regrets that I have this little cushion that I no longer contribute toward but didn't really miss the income that I paid into it along the way because it saved me some taxes and you kind of forget about the deductions when they are automatically withdrawn from paycheck.

[JBoya]

If you pay your medical bills with a credit card it is pretty easy to track expenses. And they automatically categorize the expense.

[dianaa]

I’ve never withdrawn any money from my HSA, and I’ve fully funded it to the max allowable every year since opening it. To discourage people from from opening these accounts when you are aware of its benefits seems irresponsible to me. You should be encouraging and educating people on this topic.

[CelticsWin]

I think most people should consider a HSA. At the most basic level, you can pay for medical expenses TAX FREE just by contributing to an HSA account, simple. At the more complex level, you can pay for medical expenses out of pocket, save receipts, and invest the HSA to get the full advantage.

[crfzlzi]

Hearing all the talk about medical expenses, HSA, Medicare, supplements, etc. makes me very glad I retired from the USAF back in 2001! I know some don’t like TriCare, but it’s been very good to me…for $27/mo each for me and my wife. Now that she’s on Medicare, TriCare For Life is free and takes care of what Medicare doesn’t. Those 20 years were worth it for sure!!! Thanks to all our vets!!!

[delynbarksdale]

Other disadvantages are that you have to have a high deductible plan and most employers offer those HD plans that cost pretty close to what the PPO plan costs. So it is a pretty high premium, high deductible, and that is all before you have contributed anything to the HSA. Then like on our case, covering adult dependents on insurance, we couldn't be on a HD plan and have our daughter on the PPO plan. This leaves those dependents stuck having to pay 100% of their medical expenses throughout the year, bcause of that high deductible.

[frankmendez]

I disagree with your view on this. We use the balances we accumulate for medical expenses. We use the HSA debit card which tracks the expenses automatically. I do not see this as a retirement vehicle but simply as a medical spending account. If all goes well, my heirs will not see a penny of the account.

[TimothyBiliouris]

Our investigation into an HSA revealed that a qualifying high deductible policy was expensive relative to other medical insurance policies. In addition, good health maintenance testing in an older patient essentially approximated the deductible, especially in individuals approaching Medicare age. For younger people with high incomes, this is an excellent vehicle to contribute toward future expenses with an element of tax avoidance and growth, but for older individuals with relatively higher medical expenses, the HSA is not such a clear choice. I wish I had known about this option at an earlier healthier age, when I had no desire or need to see my doctor except for a rare physical exam.

[rgh]

Our HSA is most definitely the way to go. It was fully funded with pre-tax dollars over the last two decades. The amount will cover our monthly health premiums and health care incidentals until our mortgage is paid off in 4 years. At that time, I will pay the health premiums with our personal funds, for 6 years, until Medicare kicks in. This will allow my HSA funds to grow with compounding interest until we or our heirs choose to cash out 6 years of health premiums tax-free 🙂

[morganwallace]

One other great advantage of the HSA is that it can be used for accessibility renovations and can be used for medical travel. We used an HSA to renovate the house we own for my mother in law (who for tax purposes is our dependent) which is allowing her to age in place.

[DeniseM]

I heard you mention in another video that you will use your HSA to pay for long term care insurance and I was wondering if you could make a video on long term care insurance as I would like to learn more about this topic. Love your videos.

[splatmaster]

It would be great if you did a set of videos on the cost of healthcare when one retires early. One of the biggest factors keeping me on the job is the perception that healthcare cost is going to ruin me