Why Max Out Your HSA | BeatTheBush

Have you noticed that little thing in your pay benefits such as the HSA account that requires a high deductible health plan? It may see a bit random but this savings vehicle is actually a very useful tool to help you reduce you taxable earnings! Typically, you can use the money in your HSA tax-free for qualified medical expenses. But why should you only contribute what you use in one year? Why not just max it out because you will eventually use this money for medical expenses anyway? Worst case is you contributed too much but you can still take this out of your HSA after 65 and you only have to pay income tax with no additional penalty. It has the advantages of a 401k PLUS being able to use it tax free now on medical expenses. Therefore, this should be prioritized over 401k contributions but AFTER 401k matching.

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[KRISIS]

Two tips:

1: Pay with a cash back credit card and reimburse the cost by a fund transfer with your HSA. This will get you a little money back.

2: You don’t actually have to reimburse the same bills the same year. E.g. if you paid out of pocket of a total of 10000 bucks for the last ten years, you can reimburse yourself of that total whenever you want (just be sure you have the receipts as proof). By holding the money longer in your hsa, you allow it to grow bigger and faster vs taking those withdrawals per year...

[hardlyillegal]

I would also add that you can use an HSA to pay for your spouse or dependents medical expenses WITHOUT having them on your health insurance plan. I think that's a huge bonus!

[jckclt]

Next to the free money your employer puts into a 401k, the HSA is the single best "account" you can have. Triple threat, money goes in tax free, grows tax free, comes out tax free. Max it out!!!

[averagedude]

My new job offers a high deductible plan with HSA. I’m taking advantage of it and fully funding it.

[nikkismith]

This was an AWESOME VIDEO! I'm currently in the process of switching from a low-deductible, FSA insurance program to the HDHP with an HSA. One day I will be able to max it out each year :-) Thanks again for explaining the process! I'm following your channel.

[PlanwithJohn]

Max it out the HSA and pay for medical expenses OUT OF POCKET. Many people seem to miss this vital point! I know it sounds reverse, but if you think about it then it makes sense.


With such a low maximum contribution if you take from the account early on the ability for it to grow is greatly reduced and you can only add a limited amount back per year.
The Hsa is tax-deferred and tax free when taken out. Grow it into the biggest tax free retirement asset possible by not taking from it. Don't stunt the future irreplaceable growth if you can afford it.

[Adlve]

I knew about hsa. I used my hsa last year to pay off my Braces and ( all my dental expenses) especially my employer matchs up to 300$ a year. Free money. By using my hsa i saved almost 1000$ in overall dentist expenses

[MinhBui-niby]

One other thing, when you retire, you can withdraw it just like a 401k. You can then use it for ANYTHING.

[jattaya]

I never knew any of this;and it makes me want to learn more, thank you.

[southbound]

Since I max out my 457b and IRA every year I use the HSA as a stealth IRA.

[andrw_]

Lots of good info and good comments. I haven't seen many people mentioning that you can also invest the money in the HSA, making it arguably the best retirement account you can have 🙌

[landlubber]

I'm hopping on the HSA + high ded plan this year. After age 65, you can take the money out for non-medical expenses and it's tax-free.

2 month edit: I was wrong. After age 65, the amount you take out for non-qualified medical expenses is taxed as ordinary income but will not get a 20% penalty as you would if you withdrew under age 65. Still seems like a good deal for people who are either very healthy or very sick since if you're very sick, you pay that max deductible and then you're covered after that (usually).

[UncleGreatness]

Very eye opening video. I'm going to Max my HSA and My Roth.

[ANSNify]

Thank you for this video. I need to choose among various PPO options in the next few weeks. Now I am planning on getting the plan with HSA account after seeing this video.

[michaelparker]

I going to start my hsa and 401k Roth plan. Thank you. 😎

[pumpkinqueen]

Thank You SOOO MUCH for making this video- BIG HELP!!! 😉

[lurkonexpert]

I have never enrolled into an HSA before, but as I'm enrolling in benefits I was hoping you would have a video on it further explain it's benefits. Your knowledge is amazing. Thank you for sharing.

[xiaofuwu]

FYI: You can use HSA money for Lasik Eye Surgery or Braces Treatment. A young and health adult, who wants these medical/cosmetic procedures, can get a nice discount by using their HSA account.

[passiveincomeguide]

Thank you, this is great advice! Always love this channel

[dmang]

It's not true that you have to be young and healthy to choose the High Deductible option. I created a spreadsheet which compared the two cost depending on how much is spent. In 2015, there's a small window where the low deductible option was better. It was if you spent $13, 000 or more. After switching companies, the High Deductible option is always better. I'm not sure why anyone would choose the low deductible option. Note that the company adds ~$750 to your HSA account if the High Deductible option is chosen.