WEBVTT - Are HSAs the Best Retirement Account? #105 0:00:00.080 --> 0:00:02.800 Welcome to How the Money. I'm Joel and I'm Matt, 0:00:03.000 --> 0:00:05.680 and today we're talking about h s A s. Are 0:00:05.720 --> 0:00:26.759 they the best retirement account? All right, Joel, I am 0:00:26.760 --> 0:00:28.960 pumped to talk about h s A S, which, by 0:00:28.960 --> 0:00:32.360 the way, stands for health savings accounts. They are relatively 0:00:32.400 --> 0:00:35.720 new on the financial scene. Yeah, I mean like it 0:00:35.800 --> 0:00:39.600 depends on how you classify new, right, like yeah, early 0:00:39.600 --> 0:00:41.680 two thousands, Yeah, that's when they came about. But we 0:00:41.760 --> 0:00:43.720 are going to mostly talk about how they are a 0:00:43.840 --> 0:00:47.680 fantastic retirement accounts. We're going to dive into why that 0:00:47.840 --> 0:00:49.800 is in this episode. And a lot of people don't 0:00:49.840 --> 0:00:51.360 even know what an h s A is or if 0:00:51.360 --> 0:00:53.280 their h s A eligible, So we're gonna get into 0:00:53.360 --> 0:00:55.360 all that. Matt. By the way, you were out of 0:00:55.360 --> 0:00:57.840 town for a week recently and the girls and I 0:00:57.840 --> 0:01:00.240 would come over and we would water your garden. It's 0:01:00.240 --> 0:01:02.760 looking beautiful, dude, and I noticed that you're harvesting a 0:01:02.760 --> 0:01:05.200 lot of stuff. Now, yeah, man, that's right. Well, you 0:01:05.240 --> 0:01:07.200 know what, before you came over, Kate and I had 0:01:07.240 --> 0:01:11.120 a fantastic meal and she made this triple mushroom pattee 0:01:11.640 --> 0:01:13.920 and we ate some of our fresh tomatoes. By the way, 0:01:13.959 --> 0:01:16.160 the kids aren't here with us this week because they're 0:01:16.200 --> 0:01:19.920 at grandparents camp, and so we're enjoying that's married without 0:01:20.000 --> 0:01:22.600 kid's life, where Kay can spend as much time as 0:01:22.640 --> 0:01:24.800 she wants without kids pulling on her leg while she's 0:01:24.880 --> 0:01:28.600 whipping up dishes. Grandparents camp equals adult freedom. It's pretty, 0:01:28.600 --> 0:01:30.760 it's pretty glorious thing. It's amazing. But yeah, I'm glad 0:01:30.760 --> 0:01:33.000 you mentioned the garden. That's something we talked about doing 0:01:33.080 --> 0:01:35.640 just months ago. Even the garden, it's tons of fun, 0:01:35.680 --> 0:01:38.399 it's super cool. The girls love it. Kate herself, she 0:01:38.400 --> 0:01:40.360 actually gets a lot of joy and just kind of 0:01:40.360 --> 0:01:43.399 cultivating the plants. But dude, let me tell you what, 0:01:43.480 --> 0:01:46.520 it is a lot of work. Which is interesting because 0:01:46.520 --> 0:01:48.840 when I first met you, you had a big garden 0:01:49.280 --> 0:01:52.480 in your backyard at yeah, oh yeah, I didn't know 0:01:52.520 --> 0:01:54.120 that you had this big guarden back in the day, 0:01:54.200 --> 0:01:57.040 and it was probably, let me guess, it was probably 0:01:57.040 --> 0:01:59.880 about twenty ft by ten ft. Honestly, it was more 0:01:59.920 --> 0:02:02.280 like thirty by thirty. It was. It was a massive garden. 0:02:02.600 --> 0:02:04.640 And so now you're rolling with a much smaller garden 0:02:04.640 --> 0:02:07.240 in the front yard, which is probably what ten by ten. 0:02:07.480 --> 0:02:09.919 I should know this. It's as square foot garden. Kate's 0:02:09.919 --> 0:02:12.760 really gotten into it. Basically, it's all about gardening in 0:02:12.800 --> 0:02:14.800 a small plot of lane and essentially what you do 0:02:14.880 --> 0:02:18.000 is every square foot you plant something. And what you do, though, 0:02:18.040 --> 0:02:20.120 is you go vertical instead of letting it spread out. 0:02:20.120 --> 0:02:22.440 So if you're limited in space, that's what you do. 0:02:22.720 --> 0:02:24.600 And we've certainly had a lot of veggies. It's been 0:02:24.639 --> 0:02:29.399 fantastic eating fresh, real tasting tomatoes. We've joked before about 0:02:29.480 --> 0:02:31.960 hipster tomatoes like the purple ones, but we got them 0:02:31.960 --> 0:02:34.680 Manrowan and we had some of that before you came 0:02:34.720 --> 0:02:37.919 over for lunch and it was fantastic. Not to mention 0:02:38.040 --> 0:02:41.160 other other awesome stuff like okra. I know you like okra? 0:02:41.280 --> 0:02:42.920 I do? I? Yeah? I made some fried okra at 0:02:42.919 --> 0:02:45.120 home the other day. Was so good. Another favorite of 0:02:45.160 --> 0:02:47.519 ours is shohido peppers. Have you ever had shohidos like 0:02:47.720 --> 0:02:50.440 blistered shochidos? No, but it sounds good. Oh my gosh, 0:02:50.560 --> 0:02:52.040 I think you would love them. I'll try it. It's 0:02:52.040 --> 0:02:54.600 a it's a perfect mix between veggie, but on the 0:02:54.600 --> 0:02:56.200 grill as well, because you get real hot and they 0:02:56.240 --> 0:02:58.560 blister and amazing flavor. Well, I feel like we need 0:02:58.600 --> 0:03:00.560 to do a whole episode on garden ng or like 0:03:00.600 --> 0:03:02.600 kind of outside of the box ways to grow your 0:03:02.639 --> 0:03:04.440 own food, to think about your own food. You actually 0:03:04.440 --> 0:03:06.440 need to do an episode on specifically how to cook 0:03:06.520 --> 0:03:09.640 inexpensively too, And I'm looking forward to taking those topics 0:03:09.639 --> 0:03:11.680 in the future. That's Skates, jam Man. We should, yeah, 0:03:11.680 --> 0:03:12.840 we should do that, but I mean, I wanted to 0:03:12.880 --> 0:03:15.680 mention the garden too. It's very delicious, it's amazing, it's 0:03:15.680 --> 0:03:17.799 a lot of fun. But because it does take a 0:03:17.800 --> 0:03:19.160 lot of work, you need to make sure that you 0:03:19.280 --> 0:03:22.120 enjoy the actual work of weeding and tending to the 0:03:22.120 --> 0:03:24.320 garden if it's going to be worth it, because from 0:03:24.320 --> 0:03:26.320 a dollar to dollar standpoint, I don't know if it 0:03:26.320 --> 0:03:28.880 actually pans out, But if you can also enjoy the work, 0:03:28.960 --> 0:03:32.239 enjoy being outside doing the whole the whole gig, then 0:03:32.320 --> 0:03:33.960 and it could totally be worth it for you. Man, 0:03:34.000 --> 0:03:36.480 There's something I would imagine because I haven't done it, 0:03:36.480 --> 0:03:38.280 so I don't know, but I would imagine that there's 0:03:38.320 --> 0:03:42.200 something really amazing about eating something that you've grown with 0:03:42.240 --> 0:03:45.240 your own hands, that intangible. Like we talked about calculating 0:03:45.280 --> 0:03:47.280 your hourly rate. But that's one of those intangibles. And 0:03:47.360 --> 0:03:49.400 it doesn't even matter if it costs you more to 0:03:49.440 --> 0:03:51.680 grow your own vegetables as long as it provides you 0:03:51.720 --> 0:03:53.360 with kind of a connection to the earth and this 0:03:53.480 --> 0:03:56.640 ability to grow your own food and then eat something delicious. 0:03:56.640 --> 0:03:59.920 I mean, there are all these intangibles involved with how 0:04:00.000 --> 0:04:01.880 in your own garden that you can't put on paper, 0:04:01.920 --> 0:04:04.280 You can't put it in a spreadsheet. And man, I 0:04:04.320 --> 0:04:06.880 love that you guys are enjoying the fruits of your labors, 0:04:06.960 --> 0:04:09.480 or vegetables of your labors, as it might be. Yeah, 0:04:09.560 --> 0:04:12.640 most definitely there's some awesome independence that comes from being 0:04:12.680 --> 0:04:15.480 able to grow your own food versus being deepended on 0:04:15.520 --> 0:04:17.599 a grocery store. But you wanna go ahead and introduce 0:04:17.640 --> 0:04:19.600 our beer for this episode. Yeah, Today on the show, 0:04:19.640 --> 0:04:22.279 we're drinking Mirror Universe. It's a Hazy i p a 0:04:22.320 --> 0:04:25.320 by Fair State Brewing Cooperative. And this is another beer 0:04:25.360 --> 0:04:27.760 given to Aspire listener Riley, who donated the beer from 0:04:27.800 --> 0:04:31.080 Monday's episode. That's right, Thanks so much, Riley in Minnesota. 0:04:31.160 --> 0:04:33.560 We're looking forward to discussing this one at the end 0:04:33.560 --> 0:04:35.560 of the show. All right, Matt, So onto the topic 0:04:35.560 --> 0:04:38.680 at hand. We're talking about h s as health savings accounts, 0:04:38.960 --> 0:04:41.119 and it turns out there's a decent chance that hs 0:04:41.120 --> 0:04:45.279 as are actually the best retirement savings account most people 0:04:45.360 --> 0:04:47.599 have never heard of, and we think that most people 0:04:47.640 --> 0:04:50.039 do need to know about health savings accounts. We have 0:04:50.080 --> 0:04:52.599 a friend Brandon, who goes by the name of the 0:04:52.600 --> 0:04:55.479 Mad Scientist, and he's called them the ultimate retirement account 0:04:55.480 --> 0:04:57.200 and I don't think he's wrong. But we need to 0:04:57.200 --> 0:04:59.720 talk about who has access and how to know if 0:04:59.720 --> 0:05:02.400 you're eligible, and then also help people understand how to 0:05:02.440 --> 0:05:04.120 get the most out of their HSA. So let's get 0:05:04.160 --> 0:05:06.000 to it. Another reason too that we're talking about h 0:05:06.080 --> 0:05:08.520 S a S is because if you are getting your 0:05:08.520 --> 0:05:11.320 financial game together, you're looking for ways to to be 0:05:11.360 --> 0:05:13.280 smart with your money. You're looking for the best ways 0:05:13.279 --> 0:05:16.280 to optimize, You're looking for the best vehicles to invest through, 0:05:16.640 --> 0:05:18.520 and not everybody has an employer with a four O 0:05:18.640 --> 0:05:21.040 n K where they match right. And even with RATH 0:05:21.080 --> 0:05:22.440 I R A S, which is one of our favorite 0:05:22.480 --> 0:05:26.039 vehicles to invest within, they still have contribution limits. So 0:05:26.080 --> 0:05:28.400 if you're wanting to save and invest your money for retirement, 0:05:28.560 --> 0:05:30.039 you want to make sure that you're aware of the 0:05:30.080 --> 0:05:34.919 additional vehicles that are also tax advantage and in this case, man, 0:05:35.000 --> 0:05:37.960 this might be one of the most tax advantaged accounts, 0:05:38.000 --> 0:05:40.600 even more than a rath I RA A yeah or 0:05:40.640 --> 0:05:42.920 a four oh one K and h S A S 0:05:42.920 --> 0:05:44.880 I think get overlooked for a couple of reasons. One 0:05:45.120 --> 0:05:49.400 is that the term health is involved, so people automatically 0:05:49.400 --> 0:05:52.800 associated with health insurances healthcare. It's yeah, they assume that 0:05:52.839 --> 0:05:55.880 it's not some sort of retirement account investing vehicle, but 0:05:55.960 --> 0:05:59.400 it is health insurances. Confusing and frustrating. But if you 0:05:59.440 --> 0:06:01.839 have access to an h s A, you neglect it 0:06:01.880 --> 0:06:04.760 at your own financial peril because they're awesome. That's ragual, 0:06:04.920 --> 0:06:08.359 because h s A s are the best. One of 0:06:08.360 --> 0:06:11.000 the reasons that they're the best is because they are 0:06:11.080 --> 0:06:14.840 quite literally the most tax advantaged account out there. There 0:06:14.880 --> 0:06:17.359 are three different ways that it can be a tax 0:06:17.400 --> 0:06:20.400 advantaged account. That's a triple savings That means you pay 0:06:20.440 --> 0:06:23.120 no tax on contributions that you make to an h 0:06:23.279 --> 0:06:26.360 s A, you pay zero taxes on earnings as that 0:06:26.400 --> 0:06:29.159 money grows, and then you also pay zero taxes when 0:06:29.200 --> 0:06:32.640 you spend that money on qualified medical expenses. That's A 0:06:33.040 --> 0:06:35.200 a triple threat. And the reason that we would consider 0:06:35.200 --> 0:06:37.240 an hs A an investment account, even though you only 0:06:37.320 --> 0:06:39.760 get the extra tax advantage if you spend it on 0:06:39.920 --> 0:06:43.320 medical expenses, well, is that you can invest inside of 0:06:43.320 --> 0:06:46.440 an h s A and your money can experience compounding 0:06:46.480 --> 0:06:48.800 growth over the decades, just like you can in a 0:06:48.800 --> 0:06:50.960 four oh one K or an I R A. And 0:06:51.000 --> 0:06:52.920 we'll get into some of the nitty gritty on how 0:06:52.960 --> 0:06:55.000 you spend your h s A in retirement later on, 0:06:55.240 --> 0:06:58.480 but basically, it's important also to acknowledge that even if 0:06:58.600 --> 0:07:01.840 your employer offers an h s A to you, well, 0:07:01.880 --> 0:07:03.960 that h s A is yours and it's not taken 0:07:03.960 --> 0:07:06.400 away from you when or if you leave your job. 0:07:06.600 --> 0:07:08.560 So if your employer has mentioned that you have an 0:07:08.640 --> 0:07:10.400 h s A available to you and you haven't taken 0:07:10.400 --> 0:07:13.480 advantage of it because you one weren't familiar with what 0:07:13.560 --> 0:07:16.360 it was, or two thought that maybe it didn't stick 0:07:16.400 --> 0:07:18.320 with you when you left, well that's not true. And 0:07:18.320 --> 0:07:20.840 so it's really important to know that when you open 0:07:20.920 --> 0:07:22.760 up an h s A, it's with you for life, 0:07:22.960 --> 0:07:25.080 That's right, Joel. And we've talked about f s A 0:07:25.240 --> 0:07:27.920 s before, which are flexible spending accounts, and you know what, 0:07:27.960 --> 0:07:30.560 they're pretty good. But h s A S they are 0:07:30.880 --> 0:07:33.600 They are much much better. The biggest difference is that 0:07:33.640 --> 0:07:35.960 your money rolls over with an h s A, so 0:07:36.080 --> 0:07:38.640 you don't have to spend your contributions all in the 0:07:38.720 --> 0:07:41.040 same year that you put the funds in. It allows 0:07:41.040 --> 0:07:42.760 you to go into thinking about h s A S 0:07:42.800 --> 0:07:46.080 with more of a long term mindset. Yeah, where I'm employed, Matt, 0:07:46.080 --> 0:07:47.800 I only have access to an f s A. I 0:07:47.840 --> 0:07:49.520 don't have an h s A at my disposal. Kind 0:07:49.520 --> 0:07:51.160 of sounds like a humble brig about how great your 0:07:51.200 --> 0:07:53.840 health insurance is. Yeah, so, which means I do have 0:07:53.880 --> 0:07:56.120 access to really good health insurance, which is which is nice. 0:07:56.440 --> 0:07:58.560 But in f s A, I use that to its 0:07:58.600 --> 0:08:01.120 full potential. But if I had a high deductible plan, 0:08:01.200 --> 0:08:03.280 and we're gonna get into that in a second, I 0:08:03.320 --> 0:08:06.560 would most definitely be maxing out my h s A. 0:08:06.920 --> 0:08:08.520 And that is because some of these perks that we've 0:08:08.520 --> 0:08:10.840 talked about, and in particular that you can invest for 0:08:10.880 --> 0:08:12.960 the long term inside of an h s A and 0:08:13.120 --> 0:08:16.840 use it as an additional retirement savings account vehicle. So 0:08:16.880 --> 0:08:19.480 we're gonna talk about eligibility. We're gonna answer a few 0:08:19.520 --> 0:08:22.560 other questions regarding the h s A right after the 0:08:22.600 --> 0:08:32.839 break All right, now, so a lot of people are 0:08:32.880 --> 0:08:35.719 listening to this episode and they're wondering, Well, first I 0:08:35.880 --> 0:08:37.600 didn't know what an h s A was. I didn't 0:08:37.600 --> 0:08:39.560 know it existed. Now that I know, well, Joel just 0:08:39.600 --> 0:08:41.560 mentioned he doesn't have access to one. How do I 0:08:41.679 --> 0:08:44.400 find out if I am eligible for an h s A? 0:08:44.640 --> 0:08:46.520 And I'm glad you asked, Well, the I r S 0:08:46.520 --> 0:08:49.600 has set guidelines for who is eligible, but your healthcare 0:08:49.679 --> 0:08:53.720 plan needs to qualify as a high deductible healthcare plan 0:08:54.000 --> 0:08:56.480 in order for you to be able to contribute to 0:08:56.640 --> 0:08:57.920 an h s A. Matt, do you want to go 0:08:57.960 --> 0:08:59.720 over some of the numbers for us since your resident 0:08:59.760 --> 0:09:02.920 math or the numbers kind of suck. So we will 0:09:02.920 --> 0:09:05.360 put a link to that I r S page that 0:09:05.400 --> 0:09:08.160 has the guidelines there. But for twenty nineteen, in order 0:09:08.200 --> 0:09:11.760 to qualify for an hs A, the minimum annual deductible 0:09:11.880 --> 0:09:16.000 for an individual's health coverage is one thousand, three fifty 0:09:16.160 --> 0:09:18.920 and the number is twenty seven dollars for a family plan, 0:09:19.400 --> 0:09:22.160 and there's also maximum deductibles as well. And so the 0:09:22.200 --> 0:09:26.400 maximum deductible and out of pocket is sixty seven fifty 0:09:26.480 --> 0:09:29.640 for an individual plan and thirteen thousand, five hundred for 0:09:29.720 --> 0:09:34.040 full family healthcare. So basically, if you're deductibles fit within 0:09:34.080 --> 0:09:36.960 that range, you most definitely want to look into this. 0:09:37.160 --> 0:09:39.640 And there's a few other small requirements as well. We're 0:09:39.640 --> 0:09:42.079 not going to bore you to death with with all 0:09:42.080 --> 0:09:45.000 of those requirements, but check out the link will put 0:09:45.000 --> 0:09:47.040 that on our website. What's great though, is that a 0:09:47.040 --> 0:09:48.839 lot of the healthcare plans that are out there are 0:09:48.920 --> 0:09:51.920 labeled as such. They're labeled hs A, and they'll have 0:09:52.040 --> 0:09:53.840 that after the name, right, and so it'll might say 0:09:53.880 --> 0:09:56.240 like Blue Cross, Blue Shield h s A. Yeah, And 0:09:56.280 --> 0:09:59.880 as healthcare costs have ramped up, more and more plan 0:10:00.000 --> 0:10:03.040 and have become hs A eligible because they are just 0:10:03.080 --> 0:10:05.200 more high deductible plans on the market. And so if 0:10:05.200 --> 0:10:07.080 you're in a situation like i am, and you've got 0:10:07.120 --> 0:10:09.640 a day job in an HR department, it's best to 0:10:09.640 --> 0:10:12.560 reach out and ask if your health insurance plan is 0:10:12.720 --> 0:10:15.400 hs A eligible. Usually you can get a pretty quick 0:10:15.400 --> 0:10:17.920 response as to whether it is or isn't, But if 0:10:17.960 --> 0:10:20.360 it is, boom, it's time to start getting that ball 0:10:20.440 --> 0:10:22.960 rolling on investing in your hs A. And on top 0:10:23.000 --> 0:10:27.240 of that, some employers are actually contributing some money to 0:10:27.480 --> 0:10:29.440 an h s A that you begin to fund, which 0:10:29.480 --> 0:10:31.719 is a sweet perk. Yeah, that's that's a huge perk. Man. 0:10:31.720 --> 0:10:34.520 It's basically like a match that you don't have to 0:10:34.600 --> 0:10:37.080 put forth any effort and your employer does it for you. Right, 0:10:37.360 --> 0:10:38.960 that's pretty sick. And so that's if you have that 0:10:39.040 --> 0:10:41.840 steady nine to five like you do, Joel. But if 0:10:41.840 --> 0:10:43.960 you're self employed like I am, you still have access 0:10:44.000 --> 0:10:46.360 to high deductible health plans. Just double check to make 0:10:46.400 --> 0:10:48.200 sure that it's labeled as such or if it's not, 0:10:48.280 --> 0:10:50.440 that you're kind of digging into the details when you 0:10:50.480 --> 0:10:52.840 are picking out your plan. But regardless, if you're geting 0:10:52.840 --> 0:10:56.000 a high deductible plan, either through your employer or on 0:10:56.040 --> 0:10:58.679 your own out in the marketplace, the contribution limits are 0:10:58.679 --> 0:11:02.800 the same, which means that you and invest if you're single, 0:11:03.240 --> 0:11:06.880 and that's seven thousand dollars if you're married filing jointly. 0:11:07.200 --> 0:11:09.320 And so it's worth noting that those contribution limits they're 0:11:09.320 --> 0:11:13.120 not quite as high as a standard traditional IRA or 0:11:13.200 --> 0:11:15.120 a roth ira A. But you know what, if you 0:11:15.360 --> 0:11:17.600 couple this additional amount that you can invest in an 0:11:17.679 --> 0:11:19.760 h s A on top of what you can contribute 0:11:19.760 --> 0:11:21.760 to an IRA A. Dude, that gets to be a 0:11:21.760 --> 0:11:24.360 pretty healthy amount of money towards your retirement. That's like, 0:11:24.400 --> 0:11:27.320 instead of facing just Batman, you're facing Batman and Robin, 0:11:27.559 --> 0:11:30.600 right like this tag team Robins. Just like the little 0:11:30.600 --> 0:11:32.240 half point h s A off to the side a 0:11:32.280 --> 0:11:35.199 little bit, he both in tandem. Right, Well, maybe that 0:11:35.240 --> 0:11:37.679 begs a bigger question. Maybe the h s A is 0:11:37.720 --> 0:11:41.240 actually Batman. All right, Well, we'll tackle that. Might make 0:11:41.280 --> 0:11:43.720 that argument here in a little bit. All right, So 0:11:43.880 --> 0:11:46.079 another question that might come up for people who are 0:11:46.160 --> 0:11:49.160 just now kind of familiarizing themselves with hs A S 0:11:49.640 --> 0:11:52.720 is what if I no longer have a high deductible 0:11:52.720 --> 0:11:55.000 health plan in the future. Let's see yourself employed now 0:11:55.040 --> 0:11:57.360 with the high deductible health plan, and you start investing 0:11:57.360 --> 0:11:58.800 in an hs A and then you go back and 0:11:58.840 --> 0:12:01.520 get a traditional job with great health insurance, and this 0:12:01.559 --> 0:12:04.640 new plan has a really low deductible which is great. Well, 0:12:04.720 --> 0:12:07.320 the h s A that you invested in is still yours. 0:12:07.720 --> 0:12:10.719 You can't contribute anymore, uh, during the years in which 0:12:10.760 --> 0:12:13.120 you don't have high deductible health plans, but that money 0:12:13.160 --> 0:12:15.680 is still growing for you, and you'll still have access 0:12:15.679 --> 0:12:18.319 to that money tax free if you use it. Like 0:12:18.360 --> 0:12:22.600 we mentioned earlier on qualified medical expenses later on in life, yea, Joel, 0:12:22.640 --> 0:12:24.360 and you mentioned the year. It's it's even down to 0:12:24.400 --> 0:12:26.800 the month you might switch healthcare plans. And as soon 0:12:26.840 --> 0:12:28.520 as you start with a health care plan that does 0:12:28.559 --> 0:12:31.160 not have that high deductible plan, that month you can 0:12:31.160 --> 0:12:33.760 no longer make contributions to your hs A. So that's 0:12:33.920 --> 0:12:35.640 another way that it differs a little bit from an 0:12:35.640 --> 0:12:37.720 ira A where you kind of have an entire year 0:12:37.760 --> 0:12:40.200 to to make contributions or to not. It comes down 0:12:40.280 --> 0:12:42.760 to the month even that you have or don't have 0:12:42.960 --> 0:12:46.040 a high deductible health plan. Alright, mat So here is 0:12:46.080 --> 0:12:48.200 the question, is the h s A Batman or is 0:12:48.200 --> 0:12:52.080 it robin? Is if someone has an HSA available to them, 0:12:52.080 --> 0:12:54.920 should they invest in one and should they invest in 0:12:54.960 --> 0:12:57.920 one before maxing out the other retirement accounts that they 0:12:57.920 --> 0:13:00.800 have access to? Yeah, Juel, I mean that's the big question, right, 0:13:00.840 --> 0:13:03.040 That's what we're talking about here. And I would argue 0:13:03.200 --> 0:13:05.560 that an h s A should be fully funded before 0:13:05.600 --> 0:13:09.920 your roth IRA, before traditional IRA, and before any contributions 0:13:10.440 --> 0:13:13.040 beyond a match with your four O one K. I 0:13:13.080 --> 0:13:15.240 think the four one K with a match that comes first, 0:13:15.240 --> 0:13:18.560 because you can never beat that basically on your money, 0:13:18.640 --> 0:13:20.520 right like you can never beat that one for one 0:13:20.520 --> 0:13:23.400 dollar up to the percentage that they're willing to match. 0:13:23.600 --> 0:13:25.680 But after that, after you've reached your four O one 0:13:25.720 --> 0:13:28.840 k match, should you look at investing in a traditional IRA, 0:13:29.040 --> 0:13:31.079 should you look at investing in a roth ira, or 0:13:31.120 --> 0:13:33.200 should you look at an H S A? And I 0:13:33.200 --> 0:13:35.880 think it should be an h S A first, the 0:13:35.920 --> 0:13:39.640 reason being because it is triple tax advantage. That money 0:13:39.800 --> 0:13:42.719 is contributed tax free, it grows tax free, and it 0:13:42.800 --> 0:13:46.000 leaves that account without being taxed. It's spent on qualified 0:13:46.000 --> 0:13:49.920 medical expensive exactly exactly, and so there's a chance that 0:13:49.920 --> 0:13:53.040 that money never gets taxed or as with a roth 0:13:53.120 --> 0:13:56.040 IRA or with the traditional IRA, you're guaranteed that money 0:13:56.040 --> 0:13:58.400 is going to get taxed once at least once on 0:13:58.440 --> 0:13:59.880 the front end or the back end in some way 0:13:59.880 --> 0:14:02.480 for or fashion. Exactly. By the way, I realized that 0:14:02.559 --> 0:14:06.679 qualified medical expenses sounds like a ridiculous, stupid term, and 0:14:06.720 --> 0:14:08.280 it sounds like something the I R S would say 0:14:08.360 --> 0:14:10.560 and it is actually the I R S terminology for this. 0:14:10.880 --> 0:14:13.240 We will post a link in the show notes to 0:14:13.800 --> 0:14:16.480 a great website that kind of details what qualified medical 0:14:16.480 --> 0:14:19.360 expenses are, and we'll kind of also discuss in plain 0:14:19.520 --> 0:14:22.000 English terms what that means towards the end of the 0:14:22.000 --> 0:14:25.800 show too. But Matt, I completely understand where you're coming from. 0:14:25.840 --> 0:14:27.760 I think whether or not the h s A is 0:14:27.800 --> 0:14:31.360 Batman or Robin partially depends on people's goals. And we've 0:14:31.360 --> 0:14:33.360 talked about the roth ira A in detail, and I 0:14:33.400 --> 0:14:36.360 think the flexibility of having a roth ira A it 0:14:36.400 --> 0:14:40.400 adds to its appeal and maybe and and the fact 0:14:40.440 --> 0:14:42.240 that you can contribute a little bit more than to 0:14:42.560 --> 0:14:44.800 a wrath than you can to an h s A 0:14:44.800 --> 0:14:47.000 actually kind of, in my mind, tips the scales a 0:14:47.000 --> 0:14:50.000 little bit in favor of contributing to a wrath before 0:14:50.000 --> 0:14:52.520 you start fully funding that hs A. But the great 0:14:52.560 --> 0:14:55.920 thing is, if you are truly a dedicated saver, and 0:14:55.960 --> 0:14:58.320 you've placed a high priority on investing for your future, 0:14:58.720 --> 0:15:00.400 taking that four oh one K match if you have 0:15:00.440 --> 0:15:03.800 that available to you, and then focusing on maybe simultaneously 0:15:03.840 --> 0:15:06.480 even but focusing on the rath and then the hs A. 0:15:06.760 --> 0:15:08.240 I think is kind of a good way to think 0:15:08.280 --> 0:15:10.440 about it, and part of where you come down is 0:15:10.440 --> 0:15:13.000 going to depend on how you how much you value flexibility, 0:15:13.040 --> 0:15:16.160 and what age you're planning on quitting work. Those are 0:15:16.160 --> 0:15:18.000 some of the questions you're gonna want to ask yourself 0:15:18.040 --> 0:15:21.080 to determine which one is more valuable for you as 0:15:21.120 --> 0:15:23.920 an investment vehicle. But more than anything, what we want 0:15:23.920 --> 0:15:26.280 to communicate in this episode is that an hs A 0:15:26.680 --> 0:15:29.600 can and is truly an investment vehicle. Most of the 0:15:29.640 --> 0:15:32.120 times when people talk about in hs A, it's talked 0:15:32.120 --> 0:15:35.760 about as a current savings vehicle for medical expenses that 0:15:35.800 --> 0:15:38.800 you incur year of and based on what you can 0:15:38.840 --> 0:15:41.160 do inside of an h s A, that's the absolute 0:15:41.200 --> 0:15:42.640 wrong way to be using it. Yeah, that takes a 0:15:42.720 --> 0:15:45.600 very limited mindset and how you're approaching this amazing vehicle. 0:15:45.600 --> 0:15:47.120 It's it's kind of like if you have that brand 0:15:47.120 --> 0:15:49.000 new Tesla and you only take it to the al 0:15:49.080 --> 0:15:51.360 Di down the street and then you come back home, 0:15:51.360 --> 0:15:53.040 like that's it. There's so much more that that car 0:15:53.080 --> 0:15:54.880 can do, but you're just taking it to the grocery 0:15:54.920 --> 0:15:57.120 store and go zero to thirty and twenty seconds. You know, 0:15:57.280 --> 0:15:59.160 like that's not what you want to hear about your tesla, man, 0:15:59.160 --> 0:16:01.760 because they can go way faster, much quicker. Yeah, bottom line, 0:16:01.760 --> 0:16:04.880 the h s A is a fantastic retirement vehicle. And 0:16:04.920 --> 0:16:07.240 we're gonna talk more about how to get the most 0:16:07.320 --> 0:16:08.840 out of your h s A. We'll get to that 0:16:08.920 --> 0:16:19.480 right after the break, all right, Matt. So, we mentioned 0:16:19.520 --> 0:16:21.880 just a second ago how most people the way they 0:16:21.920 --> 0:16:24.000 talk about h s A s it's as a current 0:16:24.120 --> 0:16:28.160 savings vehicle for this year's medical expenses. And that's not 0:16:28.200 --> 0:16:30.640 the worst thing that could happen. You're still essentially using 0:16:30.680 --> 0:16:34.160 tax free money to pay for current medical expenses. But 0:16:34.200 --> 0:16:35.840 if you use an h s A in that manner, 0:16:36.040 --> 0:16:38.280 you're not really taking advantage of what it's able to 0:16:38.320 --> 0:16:40.560 do for you. All Right, So if you do want 0:16:40.560 --> 0:16:42.560 to go ahead and open an h s A, which 0:16:42.560 --> 0:16:45.640 we would recommend if you are eligible, you of course 0:16:45.720 --> 0:16:47.600 want to make sure that you are putting it to work, 0:16:47.640 --> 0:16:49.800 you're getting the most out of it. The first thing 0:16:49.840 --> 0:16:52.720 to consider is to contribute as much as you can 0:16:52.760 --> 0:16:56.080 every single year. We mentioned the annual limits, the annual 0:16:56.080 --> 0:16:59.960 contribution limits, that's singles seven thousand dollars if you're married, 0:17:00.160 --> 0:17:03.200 filing jointly try to hit those limits every single year, 0:17:03.320 --> 0:17:05.439 because you can't go back in time and contribute for 0:17:05.640 --> 0:17:08.520 prior years where you didn't aim. If you are contributing 0:17:08.520 --> 0:17:12.560 through automated payroll deductions, you are saving on fight attacks, 0:17:12.640 --> 0:17:16.159 so you're not having to pay additional payroll taxes on 0:17:16.200 --> 0:17:18.800 the money that you're contributing to your h s A. Yes, 0:17:18.880 --> 0:17:22.479 so that's an additional tax savings. Instead of just saving 0:17:22.560 --> 0:17:24.639 on the income taxes that you would have paid on 0:17:24.680 --> 0:17:27.840 that money, you're also in addition, saving extra tax that 0:17:27.880 --> 0:17:31.320 you would have paid on that income Social Security Medicare. Yeah, 0:17:31.359 --> 0:17:33.560 it's a sweet deal. Another way to get the most 0:17:33.600 --> 0:17:36.119 out of your h s A is to begin investing 0:17:36.200 --> 0:17:38.679 inside of your hs A. So treating it like a 0:17:38.760 --> 0:17:42.199 retirement account is crucial in this whole process. If you 0:17:42.240 --> 0:17:45.080 don't invest inside of your hs A, well it's really 0:17:45.119 --> 0:17:47.520 just not nearly as good of a vehicle. Thinking of 0:17:47.560 --> 0:17:50.240 your hs A like a rath IIRA or a four 0:17:50.240 --> 0:17:53.320 O one K and choosing investments inside of your hs 0:17:53.320 --> 0:17:55.560 A that will put your money in the market to 0:17:56.000 --> 0:17:58.560 grow over the long term. That's where you're going to 0:17:58.600 --> 0:18:01.199 see the biggest benefit, and that's where the h s 0:18:01.200 --> 0:18:04.199 A really really shines, and most people in effectively use 0:18:04.240 --> 0:18:07.080 their hs A by treating it like a savings account 0:18:07.280 --> 0:18:10.000 for medical expenses as opposed to treating it like an 0:18:10.040 --> 0:18:12.800 investment account to be used further on down the road. 0:18:13.200 --> 0:18:16.119 And when you're investing within your h s A, just 0:18:16.240 --> 0:18:20.560