I'm 22 and just chose a high deductible health plan because I'm healthy and only need to support myself, so why not for the time being. Anyways I'm starting to notice that the HSA tax implications and growth potential remind me of a Roth IRA. Perhaps even better than a Roth IRA because it's pre-taxed money in the first place. Once you reach $2,000 you can start contributing the excess money in the account to mutual funds which I would choose very conservatively since that money might need to be used for medical expenses in the future. Money can then be withdrawn from the HSA/investing account as you need it for qualified medical expenses. If you don't need it.. Well.. It's tax free money sitting in an account with potential to grow 4%-6% (again, investing in conservative mutual funds) and it won't be taxed or penalized as long as you use it appropriately. By 65, you are then able to use the money in the accounts however you please, thus a secondary retirement account.
IMO, an HSA can be a great retirement account behind your Roth IRA, if not right up there with your Roth IRA. I'm trying to determine if I should rush that $2,000 now so that I can get a year or two extra of compounding by the time I'm 65 or should I just let it play out. I'm currently planning on just putting the difference of my premium for the standard health insurance plan compared to what I'm paying for the high deductible plan. So I will contribute about $920 annually. It's a no brainer for me to use it putting in the difference of what I'm saving with the high deductible but I'm curious what you guys think about maybe putting in more than that. For example, if I let it play out just contributing the difference, at 65 I should have $60k-$70k assuming I don't use any medical expenses which is probably in a dream world. Lol. If I contribute $100 a month I'd be looking at something more like $180k-$200k. Currently with my Roth IRA and 401k projections, I should be looking at around 2 million (obviously at the mercy of the market but we're talking 43 years from now, so who knows). Am I thinking too much about retirement accounts? Should I be fine with maxing Roth and using 401k matches to live a comfortable retirement? I'd love to hear anyone's thoughts on it.
Is there anything I'm not considering?
Submitted November 22, 2017 at 09:40AM by sundercj http://ift.tt/2B1nETS
