WEBVTT - Ask HTM - Overrated HSA, 13% Dividend Yields, & Getting Into Real Estate #1183 0:00:00.040 --> 0:00:01.200 Welcome to Hout of Money. 0:00:01.280 --> 0:00:03.800 I'm Joel and I am Matt. 0:00:04.040 --> 0:00:13.640 Today we're answering your listener questions. That's right, Joel, We've 0:00:13.640 --> 0:00:15.640 got listener questions to get to. Today. 0:00:16.120 --> 0:00:17.920 We're gonna hear from a listener who is wondering if 0:00:18.040 --> 0:00:24.600 hsas are overrated. Another listener he's been snagging a thirteen 0:00:24.640 --> 0:00:26.520 percent dividend yield. 0:00:26.800 --> 0:00:27.320 Uh huh. 0:00:27.480 --> 0:00:30.160 Yeah, we're gonna talk about some single stock investing. Another 0:00:30.240 --> 0:00:34.199 listener is interested in the steps to get into real 0:00:34.320 --> 0:00:36.520 estate investing. We'll get to all that and more during 0:00:36.640 --> 0:00:40.640 our Listener Question Monday episode. Here at how to Money. 0:00:41.200 --> 0:00:44.479 Two different kinds of real estate investing, one which actually 0:00:44.600 --> 0:00:46.720 takes more effort than the other, which is kind of, 0:00:46.920 --> 0:00:49.839 you know, pretty simple right through, done through your keyboard. 0:00:49.920 --> 0:00:53.080 And we have different opinions on both quick, frugal, frugal 0:00:53.120 --> 0:00:55.520 or cheap for you though, Matt, you just had your anniversary. 0:00:55.560 --> 0:00:58.680 Congrats nineteen years Yeah, thank you, thank you. It's impressive. 0:00:58.720 --> 0:01:00.680 We've told Kate for a long time she could do better. 0:01:00.720 --> 0:01:01.840 She never listened to us. 0:01:03.080 --> 0:01:06.160 That's what I That's what I told her. It's it's 0:01:06.200 --> 0:01:08.080 the best, it's not a heist. What do you call it, 0:01:08.080 --> 0:01:10.440 it's the I've pulled it off for nineteen years. 0:01:10.720 --> 0:01:13.880 Wool over her eyes. Yes, you have so sour. Our 0:01:13.920 --> 0:01:18.120 anniversary's coming up in the fall, and we just it's 0:01:18.120 --> 0:01:21.600 been a minute since we've had a adults only the 0:01:21.600 --> 0:01:24.360 two of us trip, like an awesome one, and so 0:01:25.000 --> 0:01:28.000 I my mom was telling me about, Wow, this is 0:01:28.120 --> 0:01:30.440 like really cute place north of Niagara Falls. You should 0:01:30.520 --> 0:01:31.920 check it out. And I started to look it up. 0:01:31.959 --> 0:01:34.040 I was like, this place, it's awesome. So I think 0:01:34.080 --> 0:01:34.399 we're going. 0:01:34.400 --> 0:01:37.280 To go there, and sounds very romantic. 0:01:37.280 --> 0:01:38.600 I feel like there's got to be a spot near 0:01:38.680 --> 0:01:42.160 Niagara Falls called Lover's Leap. She should probably go visit 0:01:42.240 --> 0:01:45.880 because somebody one hundred years ago jumped to their death 0:01:45.959 --> 0:01:48.960 because somebody would marry them or something, right. 0:01:48.880 --> 0:01:50.960 Carve our initials into a tree or something like that 0:01:51.000 --> 0:01:55.120 to mark the occasion. Well, I was I got the 0:01:55.160 --> 0:01:57.200 okay for Emily, but I'm curious to hear your take 0:01:57.200 --> 0:02:01.560 on this. Because the by far, the cheapest ticket to 0:02:01.640 --> 0:02:07.280 get up there to Buffalo, New York was using Frontier Airlines, 0:02:07.880 --> 0:02:14.440 and the round trip price on Frontier round trip NonStop 0:02:14.720 --> 0:02:18.160 from Atlanta was eighty eight dollars eighty eight. Oh my gosh, 0:02:18.280 --> 0:02:21.160 I'm like, you has a steal, dude. And then at 0:02:21.320 --> 0:02:25.000 every other airline was at least triple that often quadruple 0:02:25.080 --> 0:02:27.600 or more. Wow, they had the best flight times, And 0:02:27.639 --> 0:02:29.320 it was like, you just got to go to Buffalo. 0:02:29.800 --> 0:02:33.839 But yes, and of course with Frontier, like you pay 0:02:33.919 --> 0:02:39.120 extra foreverything. So you want to bring a bag on 0:02:39.240 --> 0:02:41.320 board to carry on, You're gonna have to pay quite 0:02:41.320 --> 0:02:42.040 a bit of money for that. 0:02:42.520 --> 0:02:43.960 Okay, I know what your question is. 0:02:44.080 --> 0:02:45.440 I talked to Emily about this and I was like, 0:02:45.440 --> 0:02:47.480 you said, friguler cheap. I'll say we can get this 0:02:48.160 --> 0:02:50.480 great B and B we can pay more eat at 0:02:50.480 --> 0:02:54.359 this nice restaurant. But are you down with jumping through 0:02:54.400 --> 0:02:56.480 the Frontier hoops so we can save a ton of 0:02:56.480 --> 0:02:57.400 money on the flight? 0:02:57.440 --> 0:02:57.680 There? 0:02:58.200 --> 0:02:59.640 Is it frugal? Chief for me to try to do 0:02:59.680 --> 0:03:01.360 that on anniversary right out. 0:03:01.280 --> 0:03:01.720 Of the gate? 0:03:01.880 --> 0:03:05.120 Frugal dude? Because you you led with the punchline, which 0:03:05.120 --> 0:03:07.560 is that Emily approved it, so there's nothing to discuss. 0:03:07.800 --> 0:03:09.440 If it's okay with her, then it's so it should 0:03:09.480 --> 0:03:10.640 be okay with you. It's okay with me. 0:03:10.840 --> 0:03:13.239 Yeah, she debated it, though you know she was. She 0:03:13.639 --> 0:03:17.040 was not like one hundred percent sure off the bat. Yes, 0:03:17.080 --> 0:03:19.720 this is a great idea, but I think part of 0:03:19.760 --> 0:03:22.119 it was they were they were truly the best flights. 0:03:22.360 --> 0:03:25.320 But then the story she doesn't care whether or it's 0:03:25.360 --> 0:03:26.040 the best flights. 0:03:26.120 --> 0:03:28.080 She cares about whether or not she can take whatever 0:03:28.120 --> 0:03:29.840 she wants to wear on your trip. 0:03:30.000 --> 0:03:32.639 You know, like you don't want to get on this 0:03:33.280 --> 0:03:34.920 flight to come home, right right? 0:03:35.000 --> 0:03:35.880 Right? Oh gotcha? 0:03:36.040 --> 0:03:37.880 So the best flight from the Yeah, yeah, I'm paying 0:03:37.880 --> 0:03:39.000 my attention to that as well. 0:03:39.320 --> 0:03:39.960 Yeah, I used to. 0:03:40.120 --> 0:03:41.960 I used to always look at, okay, whatever is the 0:03:41.960 --> 0:03:46.320 most affordable. Yeah, I am prioritizing now. Uh, just fast, 0:03:46.640 --> 0:03:50.840 fastest overall flight time. To me, that's the biggest thing. 0:03:50.840 --> 0:03:52.800 I just don't want to spend and I don't care 0:03:52.840 --> 0:03:56.720 if it's I'll even do a uh what do you 0:03:56.760 --> 0:03:59.880 call it layover? If it means because sometimes they'll be 0:03:59.920 --> 0:04:03.520 a direct flight that wait, does that even make sense? 0:04:03.600 --> 0:04:05.320 Is there a direct flight that's sometimes slower? 0:04:05.640 --> 0:04:09.280 No, But but there's some like especially with Southwest, there 0:04:09.280 --> 0:04:11.840 are some layovers where you don't even get off the plane, 0:04:12.200 --> 0:04:14.960 where you stay on. I don't care. Yeah, it's they're 0:04:15.000 --> 0:04:17.680 just turning the plane and and they take some passengers 0:04:17.800 --> 0:04:19.839 getting off, new passengers getting on. I've done that before 0:04:19.880 --> 0:04:21.520 and it saves so much money. Was it was well 0:04:21.520 --> 0:04:25.520 worth it? Sadly though, Sadly Frontier emails me like days 0:04:25.600 --> 0:04:28.440 later and they're like, we have completely changed your itinerary 0:04:28.680 --> 0:04:32.240 and now it's like one stop in Florida and it's 0:04:32.279 --> 0:04:33.440 a much longer trip. 0:04:33.600 --> 0:04:35.640 Wait, you're going down to Florida to go to New York. 0:04:36.120 --> 0:04:39.039 Yeah, it's all gotten way worse. It's gotten so much worse. 0:04:39.080 --> 0:04:41.640 So I had to cancel these tickets that were such 0:04:41.680 --> 0:04:43.880 a deal, and I had to book a more expensive 0:04:44.120 --> 0:04:47.240 airline anyway, which was just really annoying to a frugal 0:04:47.279 --> 0:04:47.719 guy like me. 0:04:48.240 --> 0:04:52.240 Well who'd you end up booking Delta? Oh my gosh, 0:04:52.360 --> 0:04:53.680 so primo? 0:04:54.040 --> 0:04:57.640 There no other options, man, I think I don't think 0:04:57.680 --> 0:04:59.960 there was legitimate options. 0:05:00.200 --> 0:05:02.480 So yeah, well what Also? 0:05:02.520 --> 0:05:04.120 The other thing I was going to say is that 0:05:04.240 --> 0:05:05.880 how much how much does it cost to check a 0:05:05.880 --> 0:05:06.719 bag with Frontier? 0:05:07.600 --> 0:05:10.320 Well it depends. There are like packages that you can 0:05:10.320 --> 0:05:11.000 buy ahead of time. 0:05:11.000 --> 0:05:12.719 Ahead of time, like obviously if they do it at 0:05:12.760 --> 0:05:15.080 the gate, they really stuck you. Oh wait, did we 0:05:15.080 --> 0:05:18.039 fly Frontier When we went down to the Dominican we did, 0:05:18.200 --> 0:05:20.240 and the people in front of us it was too big, 0:05:20.279 --> 0:05:21.680 and then they hit them with like was it one 0:05:21.720 --> 0:05:22.320 hundred bucks? 0:05:22.400 --> 0:05:22.640 It was. 0:05:22.680 --> 0:05:24.760 It was at least one hundred dollars. Yeah, it was 0:05:24.800 --> 0:05:28.080 on the way, Yeah it was. So you really got 0:05:28.080 --> 0:05:29.880 to know that your bag's gonna fit, and you could 0:05:29.920 --> 0:05:33.120 check ahead of time, like our Codo Pacsi twenty eight. 0:05:33.120 --> 0:05:34.120 Lead leader outa. 0:05:34.920 --> 0:05:37.200 They're they're perfect because they do fit in there if 0:05:37.200 --> 0:05:40.360 it's not overpacked. But you gotta you gotta know your 0:05:40.400 --> 0:05:43.160 luggage dimension size before you fly fly Frontier and try 0:05:43.160 --> 0:05:44.040 to jump through those hoops. 0:05:44.400 --> 0:05:47.680 I will say one additional factor is the time of 0:05:47.800 --> 0:05:49.960 year that you go, because if it's during the summer 0:05:50.520 --> 0:05:52.960 and you're not wearing a whole lot of layers, guess 0:05:53.000 --> 0:05:56.359 what your ability to pack light easy? 0:05:56.560 --> 0:05:56.720 Right? 0:05:56.760 --> 0:05:59.480 Yeah, But I'm thinking about the trip Kate and I 0:05:59.480 --> 0:06:01.640 would like we outside. We'velown into Denver, which is a 0:06:01.720 --> 0:06:04.680 very affordable flight out of Atlanta, and because of that, 0:06:04.720 --> 0:06:08.359 we've gone there multiple times. Let the deal and dictate 0:06:08.360 --> 0:06:12.520 where it is you travel. But we've gone hiking late 0:06:12.640 --> 0:06:16.680 in the fall where there's like it's snowed right multiple inches, 0:06:16.839 --> 0:06:19.839 which means like we've got specialty gear, We've got lots 0:06:19.839 --> 0:06:23.120 of layers that is more difficult to pull off. With 0:06:23.160 --> 0:06:25.800 the coat of Pacci, you have to really limit your 0:06:25.800 --> 0:06:29.559 footwear and whatever else you're bringing if if it's winter months, 0:06:29.560 --> 0:06:32.640 but if it's uh, yeah, summer months, it's easier to 0:06:32.640 --> 0:06:33.480 pull off the carrier. 0:06:34.160 --> 0:06:36.080 Yeah, we were going to have to wear our coats 0:06:36.800 --> 0:06:38.400 because that's what we're gonna be able to pack them. 0:06:38.480 --> 0:06:40.320 But now we don't have that problem. The only problem 0:06:40.400 --> 0:06:42.760 is I spent too much money. So should we mention 0:06:42.839 --> 0:06:44.200 the beer math that we're having on this episode? 0:06:44.320 --> 0:06:45.320 Let's do it. Let's do it. 0:06:46.920 --> 0:06:50.880 This one is called the Lakeside kolsh By Lake of 0:06:50.880 --> 0:06:54.080 the Woods Brewing Company. Matt's who the beautiful turquoise can? 0:06:54.400 --> 0:06:56.440 It is a pretty it's a pretty can. I just 0:06:56.440 --> 0:06:58.600 decided that from now on, what we'll say is would 0:06:58.640 --> 0:07:01.320 you like to introduce because when you say let's or 0:07:01.360 --> 0:07:06.160 should we first person plural is not specific enough. So 0:07:06.200 --> 0:07:08.960 from now on I shall say, Joel, you want to 0:07:09.440 --> 0:07:11.440 tell listeners how it is that they can send us 0:07:11.440 --> 0:07:12.200 their listener question. 0:07:12.560 --> 0:07:15.720 I'm happy to do that. So if you have a 0:07:15.720 --> 0:07:17.720 money question. We'd love to take it on the next 0:07:17.800 --> 0:07:19.760 ask htm episode. Just go to how to money dot 0:07:19.760 --> 0:07:22.840 com slash ask for the simple directions, or literally just 0:07:22.880 --> 0:07:25.360 record your voice memo on the app on your phone, 0:07:25.400 --> 0:07:27.200 email it over to us how to moneypot at gmail 0:07:27.240 --> 0:07:29.000 dot com. Let's get to a bunch of good ones. 0:07:29.000 --> 0:07:33.920 Matt, Uh. Yeah. 0:07:34.160 --> 0:07:38.880 First one is going to specifically be about hsas. Somebody 0:07:39.040 --> 0:07:40.480 is like, I've heard you talk about them for so long, 0:07:40.520 --> 0:07:41.640 but I still got some questions. 0:07:41.960 --> 0:07:43.480 That's the kind of introduction I was looking for. 0:07:43.680 --> 0:07:45.880 There we go, Hey, Matt and Joel, this is El 0:07:46.040 --> 0:07:48.520 in Minneapolis. I feel like every time I have a 0:07:48.560 --> 0:07:51.960 money question, I reach out to you, So here is 0:07:52.120 --> 0:07:55.600 yet another one. I have a question about HSA's after 0:07:55.720 --> 0:07:59.680 listening to yesterday's episode. I don't have access to an HSA, 0:07:59.800 --> 0:08:03.920 but I'm still curious. Nonetheless, you talk about the benefits 0:08:03.960 --> 0:08:07.840 of HSA and all of the triple tax savings because 0:08:08.000 --> 0:08:11.240 basically the money is never taxed, and I understand all 0:08:11.280 --> 0:08:16.160 those benefits. However, the thing I don't understand is how 0:08:16.200 --> 0:08:20.200 can these accounts be so beneficial if the money in 0:08:20.280 --> 0:08:24.360 there can only be used for medical expenses? So, say, 0:08:24.440 --> 0:08:28.120 if I pay one hundred dollars bill now with cash, 0:08:28.200 --> 0:08:30.640 and I don't use my HSA, But then I use 0:08:30.720 --> 0:08:34.439 that receipt later and get one hundred dollars, That money 0:08:34.600 --> 0:08:39.240 is going to be worth less when I try to 0:08:39.280 --> 0:08:44.040 cash in in twenty years. So I understand that the 0:08:44.400 --> 0:08:47.120 HSA account in general has more money in it because 0:08:47.120 --> 0:08:49.040 that one hundred dollars was able to be in the 0:08:49.040 --> 0:08:53.079 stock market, et cetera. But if I can only get 0:08:53.080 --> 0:08:56.920 the money out for medical expenses, is the benefit that 0:08:57.080 --> 0:09:00.280 my medical expenses when I'm older are going to be 0:09:00.360 --> 0:09:06.040 more and so overall I'm spending less or what is 0:09:06.080 --> 0:09:10.520 the true benefit if it's only from medical expenses. Putting 0:09:10.520 --> 0:09:13.280 aside that if you reach a certain age, you can 0:09:13.320 --> 0:09:16.000 take the money out and treat it like a traditional wrath, 0:09:16.840 --> 0:09:19.199 which why not just put. 0:09:19.000 --> 0:09:20.319 Money into a traditional wroth? 0:09:20.920 --> 0:09:24.520 Okay, if you can convince me, that would be great. 0:09:25.080 --> 0:09:26.280 Bye, Matt. 0:09:26.320 --> 0:09:27.280 Do you're best convincing? 0:09:28.720 --> 0:09:31.880 Well, I'll first say that Elle said in what you 0:09:31.880 --> 0:09:34.400 say in twenty years it will be worth less. She 0:09:34.440 --> 0:09:38.160 didn't say it'd be worthless. It'd be worth less because 0:09:38.200 --> 0:09:41.199 I'm assuming she's talking about inflation. But yeah, well, thank 0:09:41.200 --> 0:09:43.720 you for your question, and we will convince you. I 0:09:43.800 --> 0:09:48.400 generally say too that most people's HSA will be worth 0:09:48.960 --> 0:09:53.120 less in twenty years because most people aren't investing in 0:09:53.160 --> 0:09:53.480 their age. 0:09:53.480 --> 0:09:54.640 They're not investing the dollars. 0:09:54.679 --> 0:09:56.360 Yeah, and when you look at the numbers, I think 0:09:56.400 --> 0:09:58.839 a report just came out, it's somewhare, depending on who 0:09:58.880 --> 0:10:01.760 you believe, fifteen to eight ten percent of people invest 0:10:01.800 --> 0:10:04.200 the money that's in their HSA. So the vast majority 0:10:04.200 --> 0:10:05.920 of people who have in HSAC and are sticking money 0:10:05.920 --> 0:10:09.120 in there, they're not investing that money, and so they 0:10:09.120 --> 0:10:10.720 are not taking full advantage of the account. 0:10:10.720 --> 0:10:11.320 Yeah, okay. 0:10:11.360 --> 0:10:14.000 So on that note, then, so I punched the numbers 0:10:14.000 --> 0:10:16.080 in and the example she gave was one hundred bucks, 0:10:16.920 --> 0:10:19.880 and were you to actually invest those dollars, assuming an 0:10:19.920 --> 0:10:22.920 eight percent rate of return on that one hundred bucks, 0:10:23.080 --> 0:10:26.200 in twenty years, you're not looking at it being worth less. 0:10:26.280 --> 0:10:27.880 I guess we don't know what inflation is going to be, 0:10:27.920 --> 0:10:30.640 but it's gonna be worth more at four hundred and 0:10:30.640 --> 0:10:33.880 sixty six bucks, okay, And so you can easily apply that. 0:10:34.120 --> 0:10:36.080 So instead of one hundred, you're looking at a thousand. 0:10:36.160 --> 0:10:39.679 It's worth four thousand six hundred and sixty dollars even 0:10:39.800 --> 0:10:42.160 more right if you attack on a few extra years 0:10:42.160 --> 0:10:45.520 from twenty to twenty five, maybe even to thirty and so, 0:10:46.240 --> 0:10:48.560 I don't know, I'm not going I'm to me, that's 0:10:48.600 --> 0:10:52.600 an oppressive amount of money, right, it's not like life changing, 0:10:52.880 --> 0:10:56.240 but the power of compounding is still there in Dell, 0:10:56.280 --> 0:10:59.120 I want to make sure that you fully understand that, 0:10:59.200 --> 0:11:02.240 like truly you will see your money grows substantially by 0:11:02.360 --> 0:11:04.240 making sure that you are investing it as opposed to 0:11:04.320 --> 0:11:06.520 it sitting there as cash. 0:11:06.600 --> 0:11:09.440 Yeah, when it adds that first important to mention that 0:11:09.520 --> 0:11:13.000 it's tax free compounding, right, because the money goes in 0:11:13.440 --> 0:11:15.360 and you don't pay tax, the money grows, you don't 0:11:15.360 --> 0:11:17.120 pay tax on that, and you don't pay tax when 0:11:17.480 --> 0:11:20.200 you pull the money out. But Matt, that is that 0:11:20.320 --> 0:11:22.760 is the benefit. But why if you had access to 0:11:22.800 --> 0:11:26.440 an HSA, would you potentially go with the HSA over 0:11:26.840 --> 0:11:29.240 a roth iray like El saying that seems like the 0:11:29.240 --> 0:11:32.000 most straightforward the thing is to stick it in the 0:11:32.080 --> 0:11:34.360 roth ira and just bypass the HSA. 0:11:34.480 --> 0:11:37.079 Well, that's another point that I think there might be 0:11:37.120 --> 0:11:39.400 some lack of clarity. 0:11:39.480 --> 0:11:41.120 I guess which l you can do both. 0:11:41.440 --> 0:11:41.640 Right. 0:11:42.160 --> 0:11:44.280 It sounds like you understand the basics of how the 0:11:44.440 --> 0:11:47.400 HSA works, right, you keep up with your medical expenses 0:11:47.440 --> 0:11:50.160 and essentially you reimburse yourself down the road. But the 0:11:50.160 --> 0:11:52.240 fact is you can do that HSA in addition to 0:11:52.920 --> 0:11:55.400 your roth ira. And so that means for this year, 0:11:55.440 --> 0:11:58.680 you've got a seventy five hundred dollars maximum contribution. 0:11:58.280 --> 0:11:58.840 To your wrath. 0:11:59.880 --> 0:12:02.120 You're the way you're talking, it makes me sound like 0:12:02.120 --> 0:12:05.080 maybe this is just for you, so not NATUSA for 0:12:05.120 --> 0:12:08.000 a family, which means you can contribute an additional forty 0:12:08.000 --> 0:12:10.520 four hundred dollars if you do have a family, and 0:12:10.800 --> 0:12:12.760 I'm just not aware of that. It's eighty seven fifty 0:12:12.840 --> 0:12:16.320 I believe. But that's in addition to the roth ira. 0:12:16.559 --> 0:12:18.480 So yes, not only are we talking about the roth 0:12:18.520 --> 0:12:22.880 ira roth ira contributions, which are great, but the HSA, 0:12:23.000 --> 0:12:25.320 which has the triple tax advantage, which is even better. 0:12:25.440 --> 0:12:27.959 So yeah, yeah, it's it's the bothand approach, right, and 0:12:28.440 --> 0:12:31.560 and that is ideal, right, And that means even on 0:12:31.600 --> 0:12:33.640 top of that, if you're going to actually be able 0:12:33.679 --> 0:12:36.319 to utilize the HSA the way the way we would 0:12:36.360 --> 0:12:39.480 like you to, maybe not the way it's intended, because 0:12:39.840 --> 0:12:42.600 I think, for truly I don't. I don't know that 0:12:43.000 --> 0:12:45.600 the people who created the HSA foresaw that people would 0:12:45.679 --> 0:12:49.560 be investing and using it the way that personal finance 0:12:49.600 --> 0:12:51.880 nerds have turned it. You know, they've turned it into 0:12:51.920 --> 0:12:54.280 this glorious account for retirement. I don't think that's the 0:12:54.320 --> 0:12:58.320 way it was planned at the beginning. But the great 0:12:58.320 --> 0:13:01.840 thing is, yes, you avoid complete taxation the whole way 0:13:01.880 --> 0:13:05.160 through the other thing that she mentioned in here, well, 0:13:05.320 --> 0:13:07.280 what if I don't have enough healthcare expenses? Well, I 0:13:07.320 --> 0:13:09.600 will say this. There is a cap right forty four 0:13:09.640 --> 0:13:13.560 hundred dollars a year, and let's say over twenty five years, 0:13:13.600 --> 0:13:15.880 you were to put in that amount of money mass 0:13:15.920 --> 0:13:17.520 you did an example of one hundred dollars. Well, if 0:13:17.520 --> 0:13:19.559 you put forty four hundred dollars in up to the max, 0:13:19.800 --> 0:13:22.120 you would have something like four hundred thousand dollars after 0:13:22.120 --> 0:13:24.760 twenty five years. And you might say that is so 0:13:24.880 --> 0:13:26.640 much money. I don't know that I'm going to incur 0:13:26.880 --> 0:13:30.480 all the medical costs. That would mean that I could 0:13:30.679 --> 0:13:34.880 redeem it and actually not pay tax. And that might 0:13:34.920 --> 0:13:37.960 be true if you're an incredibly healthy person, but you 0:13:38.000 --> 0:13:41.360 also have to look at what is available, like in 0:13:41.440 --> 0:13:46.960 terms of what qualifies as a deductible expense for an HSA. 0:13:47.120 --> 0:13:50.880 So it's worth digging in to see because there are 0:13:51.520 --> 0:13:57.840 what lasik surgery copays, flu shots, ibuprofen potentially even with 0:13:57.880 --> 0:14:01.400 a doctor's note, like gyms and massage. And then when 0:14:01.400 --> 0:14:05.640 you go down the road when healthcare expenses are getting 0:14:05.720 --> 0:14:08.920 even are becoming even larger in your life, talking about 0:14:09.120 --> 0:14:11.880 long term care, talking about Medicare premiums. I mean, there 0:14:11.880 --> 0:14:14.720 are all sorts of things, ways in which your health 0:14:14.720 --> 0:14:17.920 costs in all likelihood on average, are going to balloon 0:14:18.400 --> 0:14:21.640 in your older age, and you'll be glad that you 0:14:21.760 --> 0:14:24.520 socked away. I think, this big stash of money to 0:14:24.560 --> 0:14:26.640 pay for those health care costs, and you're not worried 0:14:26.640 --> 0:14:29.760 about increasing your tax bill by pulling that money out. 0:14:29.840 --> 0:14:31.800 So yeah, I don't know that it's an either or. 0:14:31.840 --> 0:14:33.640 I think it is a kind of a both, and 0:14:33.840 --> 0:14:37.400 ideally that you use both accounts. But even if let's 0:14:37.400 --> 0:14:40.440 say over the next over the next ten to fifteen years, 0:14:40.480 --> 0:14:45.280 you're only accumulating fifty grand worth of cost in terms 0:14:45.280 --> 0:14:47.600 of medical expenses, I think later on in life you're 0:14:47.600 --> 0:14:49.200 going to see a big uptick and it'll be nice 0:14:49.200 --> 0:14:50.240 to have the stash. 0:14:50.440 --> 0:14:51.360 Yeah, it's nice. 0:14:51.440 --> 0:14:53.680 And like a second ago, you said something about the 0:14:53.800 --> 0:14:57.280 you know, the fact that this is a glorious retirement account. 0:14:57.960 --> 0:15:00.440 And I think the core of what El's getting at 0:15:00.640 --> 0:15:03.680 is that it's just not that much money based on 0:15:03.720 --> 0:15:07.120 the way she's currently spending, right, And that's kind of 0:15:07.160 --> 0:15:11.360 based on the fact that she gave an example of Hey, 0:15:11.400 --> 0:15:14.400 I've got one hundred dollars, Like, okay, what's that going 0:15:14.400 --> 0:15:16.000 to turn into? And I gave example of like fouruner 0:15:16.040 --> 0:15:20.000 and sixty six bucks. It's like big whoop, fourner sixty 0:15:20.040 --> 0:15:23.080 six bucks, right, Like that is not very much money. 0:15:23.240 --> 0:15:26.360 And so all and if she is healthy, and if 0:15:26.360 --> 0:15:30.760 she does continue to be healthy, does not have medical expenses, 0:15:30.960 --> 0:15:34.040 I will, like I agree that it's not going to 0:15:34.120 --> 0:15:36.160 make as big of a difference. And so depending on 0:15:36.200 --> 0:15:40.600 the person, I will readily concede that the benefit is 0:15:40.720 --> 0:15:44.680 more in principle as opposed to how much you're actually 0:15:44.720 --> 0:15:47.480 going to be able to set aside in practice if 0:15:47.520 --> 0:15:52.360 you don't aggressively sock money away within your HSA, and so. 0:15:52.520 --> 0:15:55.400 In that even if you even if you only contribute 0:15:55.560 --> 0:15:57.320 up to fifty percent of the cap. And let's say 0:15:57.320 --> 0:16:00.240 you have two hundred thousand dollars in retirement and you 0:16:00.280 --> 0:16:03.680 can tap those receipts and it's super flexible. That I 0:16:03.720 --> 0:16:05.960 love the flexibility the account. And then what she mentioned 0:16:06.040 --> 0:16:09.520 too is that at age sixty five, you can turn 0:16:09.560 --> 0:16:11.720 the account. I think she said a traditional wrath but 0:16:11.760 --> 0:16:15.400 into essentially what is a traditional IRA that you will 0:16:15.440 --> 0:16:18.320 get taxed on. But that's great, Like that just means 0:16:18.360 --> 0:16:21.440 it's got an even extra added lever of flexibility. 0:16:21.640 --> 0:16:21.800 Ex. 0:16:21.920 --> 0:16:24.640 Yeah, you'll be taxed on it, given if that is 0:16:24.640 --> 0:16:27.880 what happens down the pike for you, But that is 0:16:27.960 --> 0:16:30.240 better than it being It's kind of like the way 0:16:30.240 --> 0:16:34.000 the five twenty nine like has added flexibility. Now this 0:16:34.240 --> 0:16:37.160 is still a flexible account, even if it's not ideal 0:16:37.240 --> 0:16:40.840 to use it under those traditional IRA circumstances. It doesn't 0:16:40.880 --> 0:16:43.400 mean that that's a loss. I think that means. 0:16:43.320 --> 0:16:45.720 It's definitely not a loss. It's just it doesn't quite 0:16:45.760 --> 0:16:49.360 have the appeal or the ring. I think if and 0:16:49.680 --> 0:16:51.880 I'm going to assume that she is this is just 0:16:51.920 --> 0:16:54.440 for herself, you're looking at forty four hundred dollars versus 0:16:54.880 --> 0:16:56.720 I mean, it's all relative, right, if you've got and 0:16:56.760 --> 0:16:59.040 most people have a relatively limited amount of money that 0:16:59.080 --> 0:17:01.560 they can set aside for retirement. You compare a forty 0:17:01.560 --> 0:17:05.600 four hundred dollars cap to employer sponsored for one K. 0:17:05.760 --> 0:17:08.200 That's a tremendous amount of money, right, Like it makes 0:17:08.200 --> 0:17:11.520 me think about it's like minitoring, and it's majoring in 0:17:11.560 --> 0:17:13.800 the minors, you know, and kind of being overly fixated 0:17:13.840 --> 0:17:16.400 on some of the smaller details, like if you if 0:17:16.400 --> 0:17:20.080 somebody's if somebody says, hey, oh, yesterday, I was able 0:17:20.119 --> 0:17:22.639 to get a fifty percent discount when I filled up 0:17:22.640 --> 0:17:25.320 at the gas station, I'm like, all right, hook me up, 0:17:25.359 --> 0:17:26.840 like tell me where to go. That's a great deal. 0:17:27.080 --> 0:17:29.720 But there's a big difference between that and someone saying, hey, 0:17:30.080 --> 0:17:32.280 I just got a five percent discount when I bought 0:17:32.359 --> 0:17:36.800 my car yesterday. Okay, Well, on paper, the fifty percent 0:17:37.040 --> 0:17:40.280 is a bigger discount, but we're talking about a smaller 0:17:40.320 --> 0:17:42.840 sum of money as opposed to a five percent discount 0:17:42.960 --> 0:17:45.320 on a larger purchase, which is going to be much 0:17:45.359 --> 0:17:48.040 more significant. So in practice, that's I guess that's that's 0:17:48.080 --> 0:17:51.240 kind of what I'm getting at that on paper and principle, 0:17:51.520 --> 0:17:54.399 you look at that triple tax advantage, quadruple tax advantage. 0:17:54.400 --> 0:17:56.199 If you're talking about this coming straight out of your 0:17:56.200 --> 0:18:00.080 paycheck where it's not even getting hit with payroll tax, 0:18:00.560 --> 0:18:04.040 you cannot beat it. Yes, And I'm not gonna let 0:18:04.040 --> 0:18:06.639 that one go, like there is nothing else that is 0:18:06.680 --> 0:18:09.399 treated that favorably. But I think it comes down to 0:18:09.440 --> 0:18:12.160 how individuals are going to use it, how much they're 0:18:12.200 --> 0:18:14.720 willing to set aside, and the additional work right, like 0:18:14.920 --> 0:18:18.360 the additional keeping up with the expenses, keeping the Excel 0:18:19.320 --> 0:18:22.080 file on hand, or the Google sheet keeping that updated. 0:18:23.640 --> 0:18:26.399 It's just another step that I think is a barrier 0:18:26.440 --> 0:18:30.880 for some folks. It's absolutely the most tax efficient, optimized 0:18:30.920 --> 0:18:33.520 way to go about doing it, but depending on your 0:18:33.520 --> 0:18:36.800 medical spending and how much you're prioritizing your other accounts. 0:18:37.119 --> 0:18:40.760 I can understand if in practice some folks are less 0:18:40.760 --> 0:18:43.640 excited about it, that's all. Yeah, Yeah, and I get 0:18:43.640 --> 0:18:47.240 that too. I guess I think Elle has just she 0:18:47.280 --> 0:18:49.800 seemed to really understand how the account works by the 0:18:49.840 --> 0:18:52.600 way she praised her question, and then still there was 0:18:52.640 --> 0:18:55.080 a disconnect between does this account make sense? And it 0:18:55.119 --> 0:18:57.120 sounded like I think she said she doesn't even have one. 0:18:57.160 --> 0:18:59.679