HSA Accounts. Also, FSA balance is accrued on day 1. He's retiring in his thirties. I’m about to enroll in an HDHP and I’ll be setting up an account on my own, but my employer is fairly progressive. Plus they offer investing (through TD Ameritrade) for $2.50/month (no minimum required). I had no idea that I could defer the reimbursals which is awesome. My wife was at her last job for about two years. Thank you very much again for the comment and I will be in touch again soon. So needless to say, I am losing on benefits and will be paying more than I have been, even though the HMO premiums were more $, it was still the way better option. It looks like the HSA option has a lower out-of-pocket maximum so assuming you hit the max every year, it seems like the HSA option would be the best choice. I want that balance to be growing, not shrinking! This post was originally published on 10/16/2012 but was updated on 11/5/2018. After figuring this out via doing my taxes, my wife found the IRS publication that did spell this out. When running your calculations though, you need to not only factor in tax-free growth but also the amount you save on taxes up front (thanks to your pre-tax HSA contributions). I really appreciate you coming back after almost a year to post an update. The following table shows the minimum annual deductible and maximum annual deductible and other out-of-pocket expenses for HDHPs for 2017. Good luck and let me know if you have any other questions! Thanks a lot for sharing your experiences. Welcome, Peter! The Mad guy put it into a chart so it is easy to visualize. Several pages later (not easy to find at all without knowing what to look for), I found the UMB investment info. Wow, that compliment is a big one, MF is a very intelligent guy and I really like his blog. I’m not sure if what I’m doing is smart or dumb. By “safer” I mean you’re sure that you don’t have to interpret the IRS Pub 502 or rely on an employee’s interpretation of it. Thank you again for bringing HSA investment to my attention a few years ago! Is that possible in all HSAs? If you drop below that $2,000, you can’t invest. Open an HSA (Health Savings Account) One of the better-known smart guys in this investment business, the "Mad FIentist", calls the HSA the "Ultimate Retirement Account" as part of a solid retirement plan, and for good reason. No one replied to my question, but I did find an answer in a later blogpost. OK, I stand corrected. Since this person didn’t spend $3172 on healthcare this year (including the $3400 investment), they have $1742 left to invest in taxable accounts. I automatically get my health insurance covered, and (unfortunately :) it’s not a HDHP, so I’m ineligible for an HSA and my school is paying a lot of money for insurance I don’t anticipate needing. Let me know if any questions arise as you dive into the details. However remember before trying to take advantage of the HSA savings strategy you should be maxing out your 401K and Roth. The benefits of saving the HSA funds instead of using them for current medical expenses is what seems marginal if one is unable to fully fund other retirement sources such as 401k and IRA but perhaps you can enlighten me further in my situation. Hey MF, I’m in a similar HSA situation. I tally up say, $12,000 of receipts and withdraw $12,000 from my HSA and it is a tax free withdrawal. Now, you have $1000 in your HSA which is tax-free. IRS wording seems to be vague and does not address this. These all get put in a folder on my computer and backed up to multiple locations. As I said there, RE HSAs, I couldn’t have said it better myself and so I didn’t! I feel the HSA bank my employer uses has structured their program so that it’s not worth using as a retirement account. 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