***Lively has started charging $24 or forces you to hold a minimum of $3,000 in their HSA. Due to this change, I do NOT recommend them any longer. Please do not use this company. A Fidelity HSA is currently free at this time***
In this video, I’ll go through the 6 HSA mistakes to avoid.
An HSA (Health Savings Account) is one of the best investment accounts available to someone pursuing Financial Independence or Early Retirement. Although the name has “health savings” in it you should treat it like a “health investment” account to get the full benefits they offer.
Someone who isn’t pursuing FIRE can still take advantage of the benefits as well. When you use an HSA account you get access to triple tax savings. Not only do you avoid paying taxes when the money goes into the account, but you also skip out on paying taxes on the growth of your investments and when money is withdrawn from the account.
The fact that you’re able to invest money within an HSA is another added bonus as well. If you instead use this account as an additional retirement account by investing the money then you could grow your account to over $300,000 as a single person or over $680,000 as a family.
Check out this HSA video where I go through even more tips to maximize a Health Savings Account:
Fidelity HSA:
Check Out My Recommendations (It helps support the channel):
🔥 M1 FINANCE Investing- Free $10 (once you deposit at least $100 within 30 days)
Here’s a video on how to use M1 Finance
📝 Empower (previously called “Personal Capital”)- Free Net Worth Tracker & Retirement Planner
🔒 AURA – 14 day free trial to see if your personal information has been leaked online
💎 WEBULL – Up to 12 Free Stocks When You Deposit Any Amount Of Money
💵 ROBINHOOD – 1 Free Stock
Join the Private Financial Independence Community for monthly private live streams, video calls (with myself and the community), as well as access to a discord group where we talk all things money (and a lot more):
📧 Business Inquiries: JarradMorrowYT@gmail.com
YOU’LL FIND THESE PLAYLISTS HELPFUL:
🏆 Financial Independence Retire Early Playlist:
💵 All Things Investing Playlist:
📲 Follow me on Instagram:
Affiliate Disclaimer: Some of the above may affiliate links. Support the channel by signing up or purchasing through those links at no additional cost to you. I appreciate you for helping me keep this channel running
Disclaimer: This video is for entertainment purposes only. Everyone’s situation is different so do your own research before making any decisions with your money. If you need help then contact a Certified Financial Fiduciary before trying anything that is mentioned in this video. I prefer a Fiduciary financial advisor that charges an hourly fee as opposed to an ongoing fee based on a % of your portfolio. Always remember that incentives determine the type of advice they give you so one that charges an hourly fee is less likely to be problematic.
#HealthSavingsAccount #HSAAccounts…(read more)
LEARN MORE ABOUT: IRA Accounts
CONVERT IRA TO GOLD: Gold IRA Account
CONVERT IRA TO SILVER: Silver IRA Account
REVEALED: Best Gold Backed IRA
Health Savings Accounts (HSAs) are a great financial tool for those looking to take control of their healthcare spending and save money for future medical expenses. However, there are some common mistakes that can easily be made when using an HSA. One of the biggest mistakes is using HSA funds for non-medical expenses.
It’s important to remember that an HSA is not a traditional savings account. The money in an HSA can only be used for qualified medical expenses. These expenses include deductibles, co-pays, prescription medications, and certain medical procedures.
If you withdraw funds from your HSA for non-medical expenses, you will be subject to penalties and taxes. For those under the age of 65, the penalty for withdrawing HSA funds for non-medical expenses is currently 20% of the withdrawal amount. This penalty is in addition to income taxes that must be paid on the withdrawal.
Using HSA funds for non-medical expenses can also negate any potential tax benefits of the account. Contributions to HSAs are tax-deductible, and any funds used for qualified medical expenses are tax-free. If you use HSA funds for non-medical expenses, you will not be able to take advantage of these tax benefits.
Unfortunately, many HSA account holders are not aware of the rules and end up using HSA funds for non-medical expenses. According to a recent survey by the Employee Benefit Research Institute, 14% of HSA account holders reported using HSA funds for non-medical expenses.
To avoid making this mistake, it’s important to keep accurate records of all HSA transactions and only use HSA funds for qualified medical expenses. Some HSA providers even offer educational resources and tools to help their account holders make the most of their accounts.
HSAs are a valuable tool for financial independence and can have significant tax benefits. However, it’s important to use them wisely and avoid the mistake of using HSA funds for non-medical expenses. With careful planning and attention to the rules, anyone can make the most of their HSA and achieve financial independence.
We have fidelity and OMG it’s amazing
But here is the problem (or question): What is the point of ending life with all this money, if you cant touch it for other general expenses? Can I later withdraw part of it for non-medical expenses? What kind of taxes will I pay then? And finally, what happens to this after when I am done, will may kids end up with the tax bill? Tks
Maybe I am blind, but I do not see your affiliate link for Lively. I just opened an HSA approved HDHP because of your video and would like to open a Lively HSA account. I would like you to receive credit. Thanks!
Did your HSA really approve those retreats? That's amazing if so!!
I thought I was able to transfer money from health equity to fidelity earlier… For some reason I am not able to now? Is there a new restriction or has something changed? Could you please help.
With the faith in banks plummeting, for good reason, is it still advised to invest your money with your HSA?
I also agree with not relying on your HSA provider to track expenses for future reimbursement. Even if you don't really want to you can end up with different providers over the years based on job changes and your employer changing providers (and also providers getting acquired by other providers).
My employer uses HealthEquity and I observed the same issues with them that you did.
Lol the way you explained how to track the expenses is like exactly how I'm already doing it
How to transfer money from one HSA account to another?
It was all simple and straightforward until the part where you want to pull out 100k, so you need 100k in receipts
I was in a traditional plan and was tired of wasting money. With an HSA, at least I get to save up money in an account to use when I actually need it.
What if your job doesn’t offer that can u get a hsa without the job offering that
Thanks for the useful information, Jared. If I start with a qualified high deductible Health plan, invested money using my HSA account, but then later I switch health plans that no longer qualifies as a high deductible plan, do I need to cancel my HSA account? Or can I keep it so long as I don't make any further contributions to it? And are my gains from the initial investment still tax free? Can I still use that initial contribution for qualified medical expenses even if I don't have a high deductible plan?
Great info! I have my own medical plan and my husband has his own. We opened an HSA in his name and wondering if we can mark it as family or if I also need to open an account. I too have a HDHP. I want to be able to contribute the max amount
It’s probably best to hold onto/archive expense receipts for as long as possible. In the video you said something about remembering where you spent money 20 yrs ago. I thought I had to hold into 5yrs worth of receipts for HSA, according to IRS? Yay or nay..
One tip that you didn't mention is that if your employer offers an HSA and FSA, it may be beneficial to have both. That way, you can max out your HSA and leave it untouched for investments and use your FSA for medical expenses incurred that year. Many FSAs also let you roll over a portion of unused contributions at year's end to the following year, which negates the risk of losing those contributions.
I diddnt invest my hsa and and it got forfitted can i get it back
Lively now charges a $24/year fee if you leave less than $3000 in your cash account.
I signed up based on this video, but will be looking elsewhere now.
Hsa accounts: more oversight than for the little man. Congress don't even get as much scrutiny .
So you don't use your HSA money and keep the receipts and then pay them later so you can build up your account with the investments? Why not just have your money growing in an IRA along with putting more money in your 401k and have regular PPO insurance? Not disagreeing just trying to understand the logic. Seems like you have to do a lot of work for the same result. Am I missing something, probably lol
You can't make an unqualified statement that if you have medical costs you'll pay more with an HSA/HDHCP. It depends on how much your deductible is, how much you save compared to a PPO and how much your employer contributes. In my case the savings going to the HDHCP plus the employer contribution were enough to cover 100% of the possible out of pocket expenses. In comparison with the PPO everything was covered 90% but the few times I had major health costs I ended up paying thousands out of pocket. Since I have had my HSA/HDHCP I have had zero out of pocket costs that weren't covered either by the insurance or the HSA. So basically I was guaranteed no down side, and the up side is that on the years that I had very few costs I banked most of my contribution to the point where I have over $26K in the account now. I invest most of that in an S&P 500 index fund. My company uses Health Equity.
Great video and just subscribed. When you say paid out, do you mean you are writing yourself a check and paying yourself in cash for the expense?