I have been paying all medical expenses out of pocket for the last 2 years, saving receipts etc. Do you guys think its a good idea to withdraw the money from the HSA and transfer it into my Roth IRA? I may be a bit confused but cant see how its possible to hold on to receipts for the next 30 years. After 65 withdrawals aren’t penalized but you have to pay tax? Similar to a tIRA?
Thx
There are concerns that the receipts are going to fade and become illegible after 30 years, if not become lost or misplaced. I have a plan to scan them all into my PC, but that’s a huge hassle I haven’t gotten around to yet.
There are concerns that the receipts are going to fade and become illegible after 30 years, if not become lost or misplaced. I have a plan to scan them all into my PC, but that’s a huge hassle I haven’t gotten around to yet.
Some will, most won’t. Personally, I just will not waste my time on such a highly improbable occurrence. Given how much you’ll spend on various medical-related bills over 30 years, enough will survive as proof of your expenditures.
That’s my point exactly.
Why wouldn’t you take out money spent on qualified med expenses and reinvest that money in your backdoor ira? Therefore you don’t have to save receipts?
Johanna, I’ve read many of your posts and think you give great advice, but this is the first time I’ve disagreed enough to say something. It’s easy to store papers in a box, it’s hard to ensure they don’t get lost, stolen, wet, destroyed, stay eligible, etc. Without knowing his health/family situation, his premiums, hs expenses, or how much he will eventually store up or whose expenses he will pay, it’s hard to know that he will rack up enough expenses later to use the account when he needs it. He may have a year where he has $4k in expenses but needs to take out $10k to pay for something else. What if he needs to use that money sometime before retirement for other expenses and doesn’t have a way to withdraw the money? I also consider an HSA an emergency fund, not just a retirement fund.
Johanna, I’ve read many of your posts and think you give great advice, but this is the first time I’ve disagreed enough to say something. It’s easy to store papers in a box, it’s hard to ensure they don’t get lost, stolen, wet, destroyed, stay eligible, etc. Without knowing his health/family situation, his premiums, hs expenses, or how much he will eventually store up or whose expenses he will pay, it’s hard to know that he will rack up enough expenses later to use the account when he needs it. He may have a year where he has $4k in expenses but needs to take out $10k to pay for something else. What if he needs to use that money sometime before retirement for other expenses and doesn’t have a way to withdraw the money? I also consider an HSA an emergency fund, not just a retirement fund.
First of all – thank you for the high compliment. I don’t take that lightly! For me, it’s not worth the time and trouble to scan and save so many odd receipts. Maybe my husband and I happen to have more than average. I do understand your concerns with flood, fire, etc. Of course, a safety deposit box would suffice or a fireproof safe and the cost of such versus value of time saved would be comparable or better. otoh, I (personally) believe it is highly improbable that your receipts will ever be questioned for medical expense reimbursements for HSA withdrawals. Possible, of course, but I’m relying on anecdotal evidence from 35 years of what the IRS questions. Minuscule compared to the fears. Yes, some will fade but even presenting a box of faded receipts that have been organized over a 30-year period would satisfy an examiner that you have made an organized and fair attempt to document records.
As to his expenditures, my comment was based on average health expenditures projected for retirees around a quarter of a million per person (I had just read an article about it) and the timing probably influenced my response.
Aside from “lowering your savings rate”, why wouldnt everybody do this?
I am not looking to”raid” my HSA to fund a backdoor roth. Im looking to not save receipts and or digital copies of receipts for 30 years.
If the money goes in tax free, withdrawn tax free from the HSA for expenses, and then re-invested in a roth, why not do it? I plan on always having my max out of pocket in the account as cash, and the rest, invested. Obviously replenishing the cash if a withdrawal is made prior to investing future contributions.
how and why is there a difference in quality of investment?
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