<p>
There are for contributions, but not for conversions.</p>
<p>IMO conversions to a Roth are not worth it except in very specific situations. Unless you have estate planning reasons or manage the tax implications very carefully it will probably cost you more in taxes to convert.</p>
<p>âIMO conversions to a Roth are not worth it except in very specific situations. Unless you have estate planning reasons or manage the tax implications very carefully it will probably cost you more in taxes to convert.â</p>
<p>Though it will cost you nothing in taxes to do a back door Roth, as long as you donât have any before tax IRAs (I think thatâs the rule).</p>
<p>@CountingDownâ "we would never get to the part where any of the contributions could be rolled over. "</p>
<p>Iâm not sure I understand. You donât have to spend any of the HSA in the year; it can ALL be rolled over. If you maintain records of what you paid out of pocket, the withdrawal is tax free whenever you make it (10, 20 years of tax-free growth if you want it). </p>
<p>That of course assumes that you can pay OOP without needing the HSA funds, which are like a super-IRA: tax-free going in, tax-free growth, tax-free coming out as long as you paid medical bills.</p>
<p>My OOP expenses run about @ $12k/year, and this is with an excellent plan through my DH. This does not count premiums. $2500 of it goes through the flexible spending account. </p>
<p>Can a spouse inherit a HSA? I am not convinced Iâm going to be around to reap the benefits of 20 years of tax-free growth. If it can only be used to pay <em>my</em> medical expenses, I think we are better off with what weâre doing.</p>
<p>Most of my retirement $$ is in an IRA (contributions plus rollovers), all pre-tax. Since I donât expect any estate tax issues, am probably better off leaving it as is. </p>
<p>Handy-dandy rules for IRA and other retirement plan distributions:
<a href=âhttp://www.irs.gov/Retirement-Plans/RMD-Comparison-Chart-(IRAs-vs.-Defined-Contribution-Plans)â>http://www.irs.gov/Retirement-Plans/RMD-Comparison-Chart-(IRAs-vs.-Defined-Contribution-Plans)</a></p>
<p>A spouse (or any heir) can inherit an HSA; for tax purposes, it is treated as an IRA. It can be used for anything, but it is taxed like an IRA if itâs used for non-medical expenses; which shouldnât be a problem for you if youâre generating $12K OOP/year.</p>
<p>Iâm not saying itâs for everyone. I am a big fan, but for reasons Iâd rather not go into, I have decided to spend the HSA money as it gets accumulated rather than keep it for years.</p>
<p>For us, it seems worthwhile to convert what we have in pre-tax IRA into Roth IRA as we can afford to convert - and the Roth money is going to be the last used during our retirement years - or used when we want to stay below a tax threshold for a year, so it can grow and grow w/o tax consequences when withdrawing. We are under 60 and expect to live many years. I converted into Roth what we could this year - will see the tax bill when I see it, but I believe we have it covered with what we have had deducted for federal taxes.</p>
<p>I have to look at our employee benefits more closely, but the way it has always worked in the past has been use up the money in the year for medical, or lose the money. So every year underestimate amount so never lose any money. I have to look at what we spent out of pocket this year and see what is reasonable for next year. Thankfully my bone scan last week Wed came back NO CANCER, so can live life more optimistically. My co-pay for the bone scan was only $70, although I have not see insurance EOB yet. Thankful for great insurance coverage continuing. The company plan out of pocket limitations helped us during our max out of pocket years (co-pays and deductibles) - 4 of the last 5 years. This year our medical spending was back down to âhealthy normalâ.</p>
<p>I hope everyone has great plans for Thanksgiving and Christmas/Holiday Season! We love our family time.</p>
<p>@SOSconcern, I think youâre confusing FSAs and HSAs. </p>
<p>Here are the differences: <a href=âhttps://www.huntington.com/health_savings_account/HSA_vs_FSA.htmâ>https://www.huntington.com/health_savings_account/HSA_vs_FSA.htm</a></p>
<p>We have had employer FSA but in past money could not carry over from one year to next on either child care or medical account (you elect to put money into either or both of these areas with payroll deduction); also had a child care account during some years when we had child care. However some other posters here had me wondering if things changed.</p>
<p>And it did have me confused on the terminology. Since Hâs employer plan seems pretty rigid the flexibility seemed to me an oxymoron. Thanks for the snapshot showing the details @lxnaybob </p>
<p>This headline cracked me up:</p>
<p>[Theyâre</a> Old, Theyâre Rich and, Too Bad for the Economy, Theyâre Kind of Tight](<a href=âSilent Generation Wins Life Lottery as Richest Group: Economy - Bloombergâ>Silent Generation Wins Life Lottery as Richest Group: Economy - Bloomberg)</p>
<p>Some amazing statistics in there:</p>
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</p>
<p>Thatâs a tremendous transfer of wealth to what is now the most well-off segment of the population. But at least it has had good results:</p>
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</p>
<p>Great Bloomberg read @notrichenough . The first couple of paragraphs said it all - when they married in 1959, they saved 10% of every paycheck (so they lived being debt free except for house). Also says well-timed equity and property investments. Now they live in a retirement community. So using the time-value of money accruing. Also using diversified approach to investing.</p>
<p>He also was fortunate to purchase a home in Maui Hawaii in the 1980âs and sold the house in 2008 at 300% profit. Then put $$ in mutual funds as S&P 500 hit an almost 13 year low.</p>
<p>Not many of us will get that kind of return selling our home. How much one has tied up in their personal use real estate is a conscience decision on how much you enjoy the use w/o having the money invested elsewhere.</p>
<p>I was surprised that in 1959 35% of 65 and older Americans were in poverty (the highest poverty rate category) but now in 2013 65 and older Americans have a poverty rate lower than any other age group (9.5%).</p>
<p>Those of us under 65 are just keeping it together to cross the line for Medicare!</p>
<p>Now that many areas have recovered (some better than others) with the housing crisis of 2009, some are dealing with the wrath of student loans (heard some statistics today on public radio about âdefaultâ percentages - so those folks have their debt working against them - esp the interest rate and how their debt is growing). </p>
<p>@colorado_mom â we have had a high deductible PPO with HSA for the past few years. The annual max one can deposit in the HSA is $6500 (or so) for a family and since we have a family deductible of $6K, we deplete the balance every year and start paying with post-tax dollars toward the end of the year. Next yearâs plan will have a deductible in excess of the annual limit, so we will be paying more with post-tax money. We will also have a higher coinsurance after satisfying the deductible.</p>
<p>The biggest change for me was going from a plan where we had a defined co-pay, payable at point of service, to one where we pay the first $6K in negotiated fees. We do not pay anything when we visit the doctor, but instead wait for the EOB in the mail AND then the Drâs bill. Call up and charge to HSA debit card or pay on-line, if the option exists. Once we exceed the $6K deductible, the plan moves to a cost-sharing so the same EOB & billing cycle continues. Lots of paperworkâŠ. I do not know if your plan will be similar, but I think most of these high deductible PPOs operate the same way. Drugs are paid for at point of purchase and also accrue to the deductible.</p>
<p>Operationally, it is almost like the old Major Medical plans before the days of managed care, except that I paid providers up front and filed for reimbursement after the fact back then.</p>
<p>I never considered trying to save the money for retirement expenses as we are using it as we go, and no one has a chronic illness. I wish we could deposit more money in the account. We do have access to a separate FSA for vision & dental care expenses only. It operates like the traditional FSA: use it or lose it, with a 1st quarter grace period each year. Useful for braces and contacts.</p>
<p>The co-Portfolio manager for one of our investments through our financial guy was the speaker at a client dinner tonight. It gave me a good understanding of how they achieve their annualized compound returns (net of mgmt fees). H might have learned some things too - he is following more of the information, esp since our financial guy Don explains things pretty well.</p>
<p>Thanks CT. We still have decent coverage for preventative medical expenses. So for me the main appeal fo the HSA is (due to the hard sell pitch this year) seed money from employer and lower monthly rates. Ugh⊠donât like the sound of more paperwork. But it may be worthwhile. </p>
<p>At this point, I guess my main concern is trusting that HSA account canât go away with changed jobs etc. </p>
<p>A caution to anyone considering early retirement: Friends of ours retired early (age 60), sold their house and are living off the proceeds until they can access their retirement accounts. She assures me that they have plenty of money. After renting for a couple years, they now want to buy. They want to make an offer on a house, and applied for mortgage pre-approval â asking to finance only 20% of the price. They were turned down because they have no income. </p>
<p>They are going to try other, local banks. Any other thoughts? </p>
<p>Interesting. I was looking into getting a mortgage myself recently. I asked specifically if they would approve a loan to a retiree. They donât seem to think it woul be a problem.</p>
<p>Iglooo, are you retired? (I am a newbie on this board, start to recognize certain screen names and types of threads they post or respond)</p>
<p>It may depend on the bank when it comes to mortgage approval to a retiree? Do you think banks or mortgage companies consider monthly government pensions as âincomeâ? We wonât be moving/downsizing for another 4 years or so until my daughter graduates from college.</p>
<p>Yes, just about with negligible wage from very part time. I have no idea what they consider.</p>
<p>fireandrain,
do they have investments and other savings? I would think if they have plenty of assets, they can demonstrate ability to pay from unearned income without it having to come from earned income. Plenty of retirees buy real estate. </p>
<p>I donât know their financial specifics, but I think itâs a crummy idea to have a mortgage on your primary residence in retirement if you can avoid it.</p>
<p>ETA: investment properties are a different matter</p>