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I would love an HSA but I'm in a fairly bitchin EPO/HMO, not a HDHP.
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Jul 14, 2020 19:39
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dexter6 posted:After age 65 you can use HSA money for anything. And HSA money can be invested in index funds just like your retirement. And it rolls over from year to year. And you can use it for medical expenses at any point in your life. You can only contribute while on a HDHP. Okay, so it lasts forever, I can't roll it into anything else, but otherwise it's like IRA space that you can also use for health expenses?
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Jul 14, 2020 19:46
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alnilam posted:Okay, so it lasts forever, I can't roll it into anything else, but otherwise it's like IRA space that you can also use for health expenses? That's right. It isn't like an FSA where the money goes away. You cannot rollover the HSA funds into an IRA or 401k, but you can transfer HSA money from one account to another HSA account. If you don't spend the HSA money on qualified medical expenses, you can make withdrawals at age 65, where then you will have to pay income tax on the amount you withdrew. silence_kit fucked around with this message at 20:03 on Jul 14, 2020 |
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Jul 14, 2020 19:58
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You really shouldn't use HSAs for your medical expenses unless you literally cannot afford it otherwise. They're basically another tax savings tool, and you essentially waste a lot of the value of it if you immediately take the money out to cover medical expenses that you could have covered with your freely available cash.
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Jul 14, 2020 20:35
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Yeah if your savings can absorb the cost of this medical thing you need right now then it is better to just pay it yourself and let the HSA money continue to grow tax-free for another decade or two.
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Jul 14, 2020 20:39
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I disagree. Use it now. Unless you like keeping paperwork for 30 years to reimburse yourself.
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Jul 14, 2020 20:50
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nelson posted:I disagree. Use it now. Unless you like keeping paperwork for 30 years to reimburse yourself.
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Jul 14, 2020 21:03
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It's reasonable (albeit laughable) to think the state of healthcare in the USA may have changed for the better in 30 years. It literally can't get worse! Personally I max out my HSA to get my taxable income down, to let my HSA funds grow, and to allow me to pay for any medical expenses with pre-tax money. By virtue of good luck, I don't have any/many healthcare expenses currently, but if I did, I wouldn't think twice about spending HSA funds on 'em
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Jul 14, 2020 21:05
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^What?!? universal healthcare. the dream...nelson posted:I disagree. Use it now. Unless you like keeping paperwork for 30 years to reimburse yourself. I usually do the same because it is medical money. Maybe not the absolute best use of funds but whatever. The truth is that your medical expenses in retirement are going to be way more than you can save in an HSA most likely so you don't really need to ever save anything for reimbursement.
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Jul 14, 2020 21:05
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After 65 you can spend it all on hookers and blow if you want, no medical record-keeping required. edit: Unless your hookers and blow are medicinal, in which case you will be able to pay for them tax-free from your HSA with proper documentation. withak fucked around with this message at 21:15 on Jul 14, 2020 |
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Jul 14, 2020 21:13
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This cocaine is an important diagnostic drug for a serious opthalneurological condition!!
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Jul 14, 2020 21:22
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In other words: For your whole life, you can use it for qualified medical expenses and pay no taxes. But you should probably wait until you're older and let that poo poo grow. Once you're 65, that money now is like 401k money, you can use it for anything you just gotta pay the government tax on the money when you use it.
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Jul 14, 2020 22:45
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GoGoGadgetChris posted:It literally can't get worse! lol if you think this
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Jul 14, 2020 23:02
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KYOON GRIFFEY JR posted:lol if you think this I'm confident that in 2050 we won't be spending USD on medical care
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Jul 14, 2020 23:04
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I’m maxing out a HSA every year and saving paperwork for thirty years to reimburse myself is exactly the plan. I’m not even particularly organized, I just keep an expanding file sorted by year and also scan all the bills as backup. I’m not exceptionally organized either. This isn’t difficult.
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Jul 15, 2020 00:23
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Loucks posted:I’m maxing out a HSA every year and saving paperwork for thirty years to reimburse myself is exactly the plan. I’m not even particularly organized, I just keep an expanding file sorted by year and also scan all the bills as backup. I’m not exceptionally organized either. This isn’t difficult. And you can always selectively do it, if you have a $5000 expense somewhere that receipt is worth, well, 500 $10 copay receipts. Google Drive on android has a great scan feature I use to organize my FSA, work, and other expenses/documents. Make sure you pay attention to the color setting, if you force "black and white" you will wind up with TINY files.
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Jul 15, 2020 00:36
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What kind of paperwork exactly do you need to save to use the HSA in retirement? Are there annual contribution statements that you get or something?
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Jul 15, 2020 00:40
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alnilam posted:What kind of paperwork exactly do you need to save to use the HSA in retirement? Are there annual contribution statements that you get or something? Receipts for medical expenses let you take the money out tax free (never taxed.) Without them you have to pay income tax on gains. Sounds really worth it to me to pull trad money to the lowest tax bracket, then draw HSA with receipts to get tax free money, blending in some Roth or whatever makes sense based on your balances.
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Jul 15, 2020 00:46
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Question on what to do with a 401k and setting up a new one. I have a Roth 401k from a previous employer at Fidelity. My new employer also has a 401k at Fidelity. Should I: 1) Roll over the old 401k into an IRA at Fidelity (or elsewhere) 2) Add the old 401k funds to the new 401k (Assuming my fund selection is adequate and equivalent on either account) In addition: My income at the new job puts me over the $139k limit for contributing to a Roth IRA. Can (or should) I open a Roth 401k at the new employer, or should I opt for a traditional 401k? Would this income limit make a difference in what I do with the old Roth 401k?
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Jul 15, 2020 23:11
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PRADA SLUT posted:Question on what to do with a 401k and setting up a new one. I prefer this approach for two reasons: 1. All of your 401k money is in one place (so less likely you’d lose account of it, you’d be surprised how many people have random accounts all over the place...) 2. You leave your traditional IRA space open at $0 balance to do your Backdoor Roths annually.
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Jul 15, 2020 23:36
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Is there a reason a Roth 401k wouldn't work because of my income? I'm above the $139k Roth IRA threshold, if it matters for a Roth 401k at all. I can open the new 401k Trad or Roth, but the old 401k is a Roth (and I prefer Roth if possible). e: I'm in a Vanguard TD with a ER = 0.15% if that makes a difference PRADA SLUT fucked around with this message at 23:54 on Jul 15, 2020 |
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Jul 15, 2020 23:50
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PRADA SLUT posted:Is there a reason a Roth 401k wouldn't work because of my income? 401k plays by its own dumb rules. Make a tax treatment decision without regard for income limits. However, there are a bunch of Highly Compensated Employee games your employer has to do, so make sure your company does that dance correctly, and encourage your lower paid coworkers to contribute as much as humanly possible.
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Jul 15, 2020 23:54
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dexter6 posted:1. All of your 401k money is in one place (so less likely you’d lose account of it, you’d be surprised how many people have random accounts all over the place...). Note that this is pretty well mitigated already by Fidelity holding both accounts.
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Jul 16, 2020 01:34
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H110Hawk posted:401k plays by its own dumb rules. Make a tax treatment decision without regard for income limits. However, there are a bunch of Highly Compensated Employee games your employer has to do, so make sure your company does that dance correctly, and encourage your lower paid coworkers to contribute as much as humanly possible. I'm not concerned about the tax treatment as I am about the logistics. Like I don't want to transfer the old funds into a newly-opened Roth 401k and then find out that there's all sorts of problems contributing to it and I have to figure out how to re-allocate everything
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Jul 16, 2020 01:44
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PRADA SLUT posted:I'm not concerned about the tax treatment as I am about the logistics. If your new choices are materially similar to the old ones, then just roll it over into the new 401k so you aren't beholden to the old place changing things. No ill will come of it.
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Jul 16, 2020 02:02
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PRADA SLUT posted:I'm not concerned about the tax treatment as I am about the logistics.
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Jul 16, 2020 13:18
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I guess I'm adding to the confusion, because rolling over your old Roth 401k into a new Roth 401k is a fine choice. But . . . If your old 401k is a Roth 401k, you could also roll it over into Roth IRA. dexter6's point 2. below would not be relevant in your case, since you wouldn't be creating traditional IRA funds in your case. Also, point 1. isn't that relevant, since presumably you have a Roth IRA account, since you are aware of the Roth IRA income threshold. dexter6 posted:My recommendation: if the fund selection is good enough, roll it in to your new 401k.
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Jul 16, 2020 13:51
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My employer is converting all our target date retirement funds to trust plus retirement funds - anyone have experience with these? the plan document is pretty brief and I feel like it’s ominous that it says at the bottom “this is not a mutual fund” Here’s the old vs new:  And the description:  Thoughts?
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Jul 16, 2020 22:13
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Mad Wack posted:My employer is converting all our target date retirement funds to trust plus retirement funds - anyone have experience with these? the plan document is pretty brief and I feel like it’s ominous that it says at the bottom “this is not a mutual fund” I'm pretty sure that's just a lower-cost version of the same fund? Nothing to worry about, maybe try to find a prospectus but the underlying allocation looks identical from the example prospectus' I found online. Congrats on saving some pennies
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Jul 16, 2020 22:20
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What are the recommendations for keeping an emergency fund in an account that does anything useful. Basically I have about a fifth of mine in a savings account that I can access instantly. The remaining 80% I have set in an individual brokerage account, mostly in bond ETFs and about 10% in a money market fund. While not the most tax advantaged I didn't want to risk the emergency fund and it was better than keeping the cash under my mattress but are there any other funds that make sense for this kind of use?
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Jul 16, 2020 22:20
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Eldred posted:I'm pretty sure that's just a lower-cost version of the same fund? Nothing to worry about, maybe try to find a prospectus but the underlying allocation looks identical from the example prospectus' I found online. Congrats on saving some pennies I believe this is correct. A trust is a different legal structure than a typical mutual fund. In this case trying to accomplish the same thing as the fund. Technically the trust owns the money not you once they get it, but they are of course obligated to follow through on the stated goal. I think the primary benefit is less reporting requirements, but someone might be able to confirm that. You tend to see lower fees because of this. It shouldn't be anything to worry about.
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Jul 16, 2020 22:23
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Thanks, that helps a lot! Normally they just keep making our benefits better but with everything going on I was concerned
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Jul 16, 2020 22:26
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E fund is pretty much "keep up with inflation". Even bonds might be too risky/illiquid but that's also bluring a bit into how much risk you want to handle with your overall allocation.
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Jul 16, 2020 22:27
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Mad Wack posted:My employer is converting all our target date retirement funds to trust plus retirement funds - anyone have experience with these? the plan document is pretty brief and I feel like it’s ominous that it says at the bottom “this is not a mutual fund” We have Vanguard Trusts in our 401k for the S&P 500 and the total US bond market. They are exactly the same except lower ER from everything I have compared in the last 5 years. wet_goods posted:What are the recommendations for keeping an emergency fund in an account that does anything useful. Mine is all with Ally. even if it was 0% interest I would keep it in a savings account.
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Jul 16, 2020 22:38
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Jenkl posted:I believe this is correct. I think we ended up at the same bogleheads link: https://www.bogleheads.org/forum/viewtopic.php?t=273782 basically says the same
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Jul 16, 2020 22:40
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I keep my emergency fund in a money market account. It's pretty liquid, well it's technically not guaranteed and a high yield savings account would give similar returns plus FDIC insurance, but my banks didn't have high yield savings and if money markets go down in value significantly it's probably a burning paper money for warmth kind of scenario anyway.
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Jul 16, 2020 22:44
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alnilam posted:I keep my emergency fund in a money market account. It's pretty liquid, well it's technically not guaranteed and a high yield savings account would give similar returns plus FDIC insurance, but my banks didn't have high yield savings and if money markets go down in value significantly it's probably a burning paper money for warmth kind of scenario anyway. Money market returns are literally zero right now most places. Firms are waiving millions because the normal expense fees would yield negative returns. The high interest savings account has made money market obsolete. If you just don't have any decent high yield savings options sure, but if it's just a matter of opening an online account I think it's worth it. Especially now.
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Jul 16, 2020 23:33
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How is it possible that interest rates are so low for so long? It feels really weird.
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Jul 16, 2020 23:49
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nelson posted:How is it possible that interest rates are so low for so long? It feels really weird. welcome to the wonderful world of treasury bond yields; you're in for a hell of a ride. https://stockcharts.com/freecharts/perf.php?$TYX,$TNX,$FVX
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Jul 16, 2020 23:51
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Jenkl posted:Money market returns are literally zero right now most places. Firms are waiving millions because the normal expense fees would yield negative returns. Oh drat you're right, mine's yielding 0.14% right now (vanguard federal money market). I tried to open a high-yield savings account with Alliant but they were difficult to deal with - I unfroze the wrong credit agency at first, and when I unfroze the right one and told them they didn't get back to me and then a month later I got an email saying they were closing my request. Anyway the couple dozen dollars I'm missing out on per year is not worth the trouble to me at this point.
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Jul 17, 2020 00:34
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