This seems like something to force savings, which some people need, but I don’t. It’s just a transfer from a tax free restricted account to a taxable brokerage, so I guess I am giving up 15% LT gains over time.
I rarely use it at the Grocery or even Pharmacy
But for MD, DDS, Lab Tests…
I pay off using the card. Maybe no optimal, but sure is easy.
I believe when I read the comparisons, the arbitrage of money going in tax-free, then coming out tax-free after years of growth was ideal, even at the expense of paying from your taxable money today.
At least, assuming you are maxing retirement vehicles. Surely it gets less valuable if you’re saving less in tax-advantaged vehicle to pay for expenses today
Any issues with the receipts fading over time? I’ve had some of my receipts lose all their visible ink. Maybe due to sunlight exposure.
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maybe a bit
I guess if the IRS audits me that could come up if it happens
otherwise it doesn’t matter because I’ve written enough of a record to take the reimbursement anyway
assumption - you can afford to pay for your qualifying medical expenses now even if outside the HSA.
then you leave the HSA to accumulate tax free as long as possible while saving receipts. in retirement, you file those old receipts and the proceeds are tax free “income”.
reality for me: i leave my HSA to accumulate and don’t save current receipts. I project to have enough qualifying expenses in retirement anyway that the w/d from the HSA i do on those contempraneous charges will be fine. I just want the HSA balance to get as large as it can.
I just pay for HSA expenses out of the account as they occur, which so far is pretty negligible. (Account is about $75K). If you need $100 I guess you’re asking do I want $100 tax free now or do I want the $100 in the future while I let the $100 grow tax free. I’ll worry about this decision when it’s REAL dollars, not chiropractor visits. Knowing me I’d probably lose the receipts but my wife wouldn’t.
Same. I assume I will have medical expenses as I age (as do most folks) so I’m not concerned about saving receipts for many years. I just let my HSA grow tax deferred for now. In the unlikely event I don’t have lots of medical expenses as an old fart, the worst case scenario is paying some tax on it when I make non medical withdrawals sometime after I hit 65.
Take digital pictures of your receipts and save them in a folder. A Clark Howard suggestion is to use the receipt amount as your filename. Have separate folders “redeemed” and “not redeemed”
Fortunately, this isn’t an issue I need to deal with. I think if I did, I’d scan the receipts into a file on a quarterly or annual basis depending on how frequently I got receipts.
I have never touched my HSA account
I plan to use it to pay for Medicare Premiums after age 65
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