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6 thoughts on “With its triple-tax benefits, the humble HSA emerges as a retirement savings powerhouse

  1. Using an HSA as a ‘”cheat code” is such a vague term. It’s just a lever to pull in retirement but I wouldn’t make it my foundation for retirement. Consider happens when you don’t want to spend the money on qualified medical expenses… “In addition to the 20 percent penalty, the IRS will also consider any HSA funds spent on non-qualified expenses as taxable income.” Ouch.

    1. The story doesn’t advocate using HSA funds for non-medical expenses. In fact, it specifically mentions that HSA savings and investments can pay for health care expenses in retirement, “a period when many people rack up higher medical and hospital bills.”

    2. The full quote was: “If you’re in a high tax bracket,” Hilgemann told CNBC, “an HSA is a complete cheat code for you.”

      In other words: if you’re rich, you’d be crazy not to max your HSA contribution since it has outrageous tax benefits and a relatively low annual cap of $8,300. Since everyone is likely to have large medical expenses at some point in their life, some financial planners will tell you to max your HSA BEFORE you max your 401(k) or other investment vehicles.

    3. Chris C. Yes, if you’re rich and can afford to max out your 401K contributions, then by all means go ahead and max out your HSA contributions. If you’re that rich and you want to retire before the age of 65, I can see this as huge boon where you can pay your $1000/month health care premiums tax free from your HSA.

      I can also see a risk here that you’re healthy for many years and then suddenly you die and all of the money in the HSA goes unspent.

  2. I will say that your investment options with HSAs are also usually limited to maybe one option. In addition, my HSA required the first $1,000 to be held as cash, which means none of that was growing at all.

    I get it, but to another poster’s point, this seems like something for people above my tax bracket.

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