Noodleface
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Gains? You mean interest? I thought interest rates were like 0.2% I've heard if you're going to save the money your better off contributing that amount to your 401k
What do you do?
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I know my HSA once it reaches a certain amount it gets used similar to 401k money to try and gain value
ZyyzYzzy
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You can invest in mutual funds and shit, similar to an IRA. Pre-tax money goes in and, as long as it is for qualified medical expenses, it is not taxed when it comes out (nor are any gains). If you are over 65, then you can take money out for any reason without penalty - you just pay your income tax rate similar to a Roth-IRA.
I max out 401k and the HSA. If you are not in that position, and you have small kids, then my experience would say to stick with a low-deduction, non-HSA health plan.
ZyyzYzzy
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He's a dirty defense contractor now. Our ilk often don't have the option for those plans anymore
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That's OK. I am resigned to the increasingly likely scenario that I am proactively saving all of this money so that the government can use it to pay for all the people who are not saving for retirement.
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I found when comparing our high-monthly, low-deduction health plan to the HSA plan, you would have to use up the HSA max contribution($6750 for 2016) each year for the HSA to be as expensive. Our post-adjusted medical expenses didn't come even close to that, so we chose the HSA plan. I plan to keep at least out of pocket max in the HSA then taper off contributions. But I didn't know about the investment stuff, so I might change that.
For anyone else still debating this, my formula was:
(whatever your company kicks in) - 12 * (monthly premiums) - (plan deductible)
Obviously, if the plans still differ greatly in percentages covered AFTER the deductible is met, or even what's covered before the deductible, the comparison might start to fall apart. That wasn't in my case. This was with Excellus BC/BS Platinum 2, Gold 17, Silver 4, and Silver 14. I know silver 4 is HSA, I think 14 is too.
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ZyyzYzzy
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And that has to do with employers not offering anything but HSA plans how?
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Sorry, I thought you were referring to alternate retirement plans. I haven't heard of employers offering only HSA-Qualified HDHP's before. That sucks...
AladainAF
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We use an HSA and contribute the maximum every year. At first I was apprehensive until I did enough research and found out that the money isn't gone if you don't use it - I do recall the early HSAs (or whatever they were called) had a use it or lose it provision which I always felt was asinine. In return, my wife pays almost nothing for her employer provided health insurance although we do have a $7,500 family deductible which is really high, we've found that we don't even come close to using the HSA funds and at this point, even if we had an emergency, we have enough in the HSA to cover the entire deductible.
ZyyzYzzy
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AladainAF
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Thanks, that's what it was. I always felt that was insanely stupid to put money in those, especially since you can get a tax deduction for medical expenses outside of the FSA. It's the same as dependent care accounts, equally pointless. I think they exist only for people who are incapable of saving money.
Noodleface
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My company stated the reasoning is Obamacare has so much red tape and restrictions and requirements that it made traditional health plans virtually impossible to offer at competitive rates (ie too expensive for company) .
The more I look into HSAs the better it sounds anyways. Fuck paying 7k a year for nothing, at least now I'll know where my money goes.
Even if my wife had a baby in 2017,highly likely since I have super sperm, the calculations show it costing less to get a high deductible hsa.
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I think you have to itemize your tax return to deduct medical expenses. Most people that own a home are likely already itemizing for the mortgage-related deductions.
Dependent care account allows you to put aside tax-free money above the limit allowed to be claimed on your tax return. FSAs are still a bad idea overall and look to be going away. They're mired in "is this covered" rules which make it really confusing to plan how much money to put in. HSA is almost always covered.
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AladainAF
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Strange, I thought it was the opposite. I'm going to ask my CPA about this. Thanks for heads up.
AladainAF
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Yeah, apparently I had misunderstood how my CPA explained it. Here's what he told me when I asked him about it. Seriously, thanks for the heads up though, we'll just eat it this year though.
For high earners when looking at the dependent care benefit it is usually better to take out the max as pre-tax earnings provided you pay more than you have taken out. As a general rule the credit is more advantageous for low income earners but because it phases out, it is not necessarily so for high earners. (The credit is taken on the return but the deduction has to go through the W-2 as it is paid to the flexspend administrator so I am not sure how we were discussing it as it simply isn’t interchangeable on the return.)
The fact that you know it only has 20% means it can only be $600 for one child ($3,000 max x 20%) or $1,200 for 2 children ((3000+3000) x 20%) so at your marginal rate that is $600 x 3 = $1,800 equivalent deduction or 1,200 x 3 = $3,600 equivalent deduction which is why I should have made clear that you needed to max out the child care benefit available to you and if I didn’t explain well enough, I apologize.
You will at least get the Credit of $600 or $1,200 if both children are in childcare in 2016. Were we perhaps discussing it in the context of reduced earnings for you in 2016 because as I remember you were very worried earlier this year, but that seems unlikely.
You are correct to take out the $5,000 in 2017.
The fact that you know it only has 20% means it can only be $600 for one child ($3,000 max x 20%) or $1,200 for 2 children ((3000+3000) x 20%) so at your marginal rate that is $600 x 3 = $1,800 equivalent deduction or 1,200 x 3 = $3,600 equivalent deduction which is why I should have made clear that you needed to max out the child care benefit available to you and if I didn’t explain well enough, I apologize.
You will at least get the Credit of $600 or $1,200 if both children are in childcare in 2016. Were we perhaps discussing it in the context of reduced earnings for you in 2016 because as I remember you were very worried earlier this year, but that seems unlikely.
You are correct to take out the $5,000 in 2017.
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alavaz
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I have the HSA plus the cheapest, highest deductible plan. All of my calculations show it to be the best value since all of the money I would pay in premiums are better placed in the HSA. I'd basically have to get some serious shit to hit my deductible, but even then, the out of pocket max isn't terribly higher than the lower deductible plans.
Heylel
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So it looks like we're relocating after the holidays, and I'll be starting my new job in early Jan 2017. I had the option of starting just after Thanksgiving, but given the huge relocate plus Christmas around the corner, it seemed easier to just wait a few more weeks. New company was fine with it, and it was their idea.
It leaves me in a strange position, because I know I have about 10 weeks left with my current employer(s) and will need to give notice down the road. I don't want to say anything too early. I have a little over 2 weeks of vacation left I can use in December, and it actually refreshes on Jan 1 if I wanted to be sneaky about it. I could give notice on Jan 1 and take my vacation immediately. That seems sorta shitty though.
It leaves me in a strange position, because I know I have about 10 weeks left with my current employer(s) and will need to give notice down the road. I don't want to say anything too early. I have a little over 2 weeks of vacation left I can use in December, and it actually refreshes on Jan 1 if I wanted to be sneaky about it. I could give notice on Jan 1 and take my vacation immediately. That seems sorta shitty though.
Noodleface
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I just waited until 2 weeks out and told my boss regardless of any pto I planned on using during those 2 weeks. They'll be pissed either way, my boss was.