Maricar19 Account Talk

[flalaw97]

I like HSA concept, but not sure if it is something I can afford.

By "afford" do you mean your healthcare costs are too high to be able to afford deductibles in a high deductible plan or you can't afford to add money to the HSA? Keep in mind that the HDHP puts in $150 a month into your HSA to help cover those deductibles. During COVID we had hardly any doctors visits so when this year we had some unexpected visits and expensive tests, there was $3000 sitting in the HSA from HDHP contributions over the past two years to cover it all. We have been pretty healthy so it is a good option for us. As to fully funding it, I think it is better to put money in the HSA than the TSP. Why? because just like TSP it is pretax dollars, and grows tax free (I have my HSABank acount invested through Devenir - VFIAX, CSZIX, DHLYX and FLPSX equally). But unlike TSP, as long as I use it for healthcare costs (which include contact lenses for me & spouse), it comes out tax free. I am certain I will have healthcare costs going into the future so not worried that it gets tied up there. Even if it doesn't get spent on healthcare, you can take it out and pay taxes just like TSP, so it is certainly no worse than TSP (other than different investment vehicles available). Worth a look if it fits your family needs. Thanks for the link. Best of luck!

 

[Maricar19]

An excerpt from KIMBERLY ROTTER's article on HSA's:

Financial planners agree that individuals should first max out 401(k) plan and IRA contributions for the year.
Then, they can start funding an HSA, which will provide additional retirement benefits.

 

[Maricar19]

Expenses at age 65 – Medicare B 2021 $148.50
Question for those experiencing the “65 syndrome” –
Did you get a Medicare Supplement to cover the gap or expenses not covered by Medicare A and B?
Did you get a Medicare Supplement outside of FEHB?
Is it correct to assume that with Medicare A and B and a Medicare Supplement, your "out of pocket" cost is manageable$$?

 

[flalaw97]

An excerpt from KIMBERLY ROTTER's article on HSA's:

Financial planners agree that individuals should first max out 401(k) plan and IRA contributions for the year.
Then, they can start funding an HSA, which will provide additional retirement benefits.

Kimberly Rotter's article: https://www.investopedia.com/articl...5/why-hsas-appeal-more-highincome-earners.asp

Actually points out the main reason that I think it is wiser to max out the HSA before the 401K - if you are already in a high tax bracket. You can only put in until you are 65 and while you are in that higher tax bracket, you are getting a better break. I disagree with the mantra in the Amy Fontinelle article you quoted to "never spend your HSA contributions during your working years and pay cash out of pocket for your medical bills." That makes no sense if your tax bracket now during your working years is higher than it will be in retirement. If you pay cash out of pocket that has been taxed at 24%, that is more expensive than pulling it from your HSA and having it never be taxed. Yes, you lose the growth potential, but you are gettting an instant 24% return on the money you spend from your HSA, right? Maybe I am missing something but the triple tax advantage of an HSA is ALWAYS going to outperform the IRA or 401K EXCEPT when you can't find a good investment avenue in your HSA options. Mine only has about 20 index funds to choose from, but I am more than happy with those options. It is never going to be as big as TSP, 401K, etc. because of the contribution limits but putting pre-tax money in a tax free bucket, that can be invested in stocks and grow tax free?! The real constraint in my mind is whether an HDHP works for you/your family. Thanks for the links, I will keep an open mind, keep researching and keep evaluating. Best of luck to all.

 

[Maricar19]

Kimberly Rotter's article: https://www.investopedia.com/articl...5/why-hsas-appeal-more-highincome-earners.asp

".. I disagree with the mantra in the Amy Fontinelle article you quoted to "never spend your HSA contributions during your working years and pay cash out of pocket for your medical bills."..

FF, Did I Quote Fontinelle? Rotter had her as a hyperlink. I wasn't aware of it until you mentioned it.:smile:

Looking back (which of course is too late), we wish we were more proactive with our retirement money.
It wasn't until 10 years before retirement that we had an active interest in our investments.
Spouse and I were just focused on earning,(where to get money for tuition, etc) and not so much with investing.
We were too focused on everyday life with our children and aging parents.
We envy the young TSP'ers on this site because they are "hands on" on their TSP account and still able to focus on everyday life.
KUDOS to these young savers.

 

[flalaw97]

You are so right! I joined TSPTalk just two years ago and I am hoping to retire in two. Totally wish I had been this proactive early (how much growth did I miss out on leaving it in G fund in the early days?!) Same here - three kids graduated from college and now it is finally time to think about us. I was lucky that my dad had bought long term care insurance to take the burden of aging parents off my sister and I. Now I have to look into LTC as well... I guess it is never too late to get better. Thanks so much for the discussion and best of luck!

 

[Maricar19]

https://www.aarp.org/money/taxes/info-2021/plan-ahead-credits-deductions-tips.html

[FONT=ff-dagny-web-pro, Helvetica, Arial, sans-serif]Charitable Deductions:
Standard Deduction: When you file your 2021 taxes next year, married people filing jointly can each take a $300 charitable deduction for cash donations, for a total of $600.
Itemized Deduction: The tax break to deduct 100% of your charitable contribution is extended to 2021.

[/FONT]

 

[Maricar19]

.."Totally wish I had been this proactive early (how much growth did I miss out on leaving it in G fund in the early days?!)"

FF, exactly our sentiments.
We can only sigh...

 

[nasa1974]

Looking back (which of course is too late), we wish we were more proactive with our retirement money.
It wasn't until 10 years before retirement that we had an active interest in our investments.
Spouse and I were just focused on earning,(where to get money for tuition, etc) and not so much with investing.
We were too focused on everyday life with our children and aging parents.
We envy the young TSP'ers on this site because they are "hands on" on their TSP account and still able to focus on everyday life.
KUDOS to these young savers.

Maricar19, Same here. Never paid much attention to my TSP until around 2004. By then both daughters had graduated from college. I was CSRS but never maxed out because of family and bills. My wife decided to give up nursing to be a stay at home mom and get involved with our daughter's schooling, etc. So we were able to make ends meet on my government paychecks.
I keep preaching 401k to my daughters and fortunately both Son-in-laws work for DFAS.

 

[nasa1974]

You are so right! I joined TSPTalk just two years ago and I am hoping to retire in two. Totally wish I had been this proactive early (how much growth did I miss out on leaving it in G fund in the early days?!) Same here - three kids graduated from college and now it is finally time to think about us. I was lucky that my dad had bought long term care insurance to take the burden of aging parents off my sister and I. Now I have to look into LTC as well... I guess it is never too late to get better. Thanks so much for the discussion and best of luck!

The wife and I looked into long term care and it was pretty reasonable. The only thing that turned us off was that if we didn't use LTC (I don't remember the cut off age) we didn't get the initial investment back.

 

[ALRetiree]

The wife and I looked into long term care and it was pretty reasonable. The only thing that turned us off was that if we didn't use LTC (I don't remember the cut off age) we didn't get the initial investment back.

We bought a John Hancock hybrid policy a few years ago. The policy pays LTC but if it’s unused, either all or a partial amount, the rest is paid as a life insurance benefit to the beneficiary. I hate the premiums but at least someone will get the money if we don’t use it for LTC.

 

[flalaw97]

Hybrid policy is what I am looking for now. My parents had a policy that had a benefit "pool" that either or both could draw from. When my dad passed (after using about a years worth of nursing home benefits), the rest of the pool is available for mom when/if she needs it but if she doesn't use it, it is gone/no payout. It was very nice not having to worry about affording one of the better nursing homes for dad but the premiums are killer (they have been paying for 20 years?). But best to get it when you are "young" and healthy.

 

[Maricar19]

Health Savings Account (HSA): Even if you are retired, but under age 65, you can still contribute to your HSA if you have a [FONT=open_sans]qualifying high-deductible health (HDHP)[/FONT] insurance.
However even if we are retired and under 65, we cannot contribute to HSA because we are covered under Tricare insurance.
We never gave HSA a thought because we knew that we will be covered by Tricare (USFHP) before 65 and then Tricare Prime and Medicare at 65.
Alas, we never looked beyond the services that will not be covered by either insurances.:scratchchin:
No matter how much preparation/ research during your pre-retirement years, there will always be,.."I wish I did that...I wish I knew that!":argue:

Long Term Care (LTC): We checked Federal Long term Care (FLTC) and it was expensive for me. Am a smoker, overweight, and so on..:lmao:
But we are still on the lookout. We are interested in the "Hybrid Policy" that FlaFlaw mentioned- where both parties can draw from it.
Per FLTC website, if benefits are unused, part/some of the premiums will be returned. The application form asks for beneficiary.

 

[Maricar19]

This is why I miss Burro...
For those who never met Burro, you missed a part of the TSP Talk life..

those are b.s. parameters. any idiot in their right mind would find other work, even if it is just darning socks from their wheelchair. or else if truly no work options they would just sign up for ssi now for max can get and spend tsp down to zero before they died. i don't think that scenario you present with only two options is very realistic. worried retirees do not think about only two hypothetical options, they think in units of cans of alpo, and take large purses to the buffet and steal ketchup packets and saltines.

 

[Maricar19]

Another TSP Talker that I miss is StopLight..haven't seen him around

 

[tsptalk]

He's around occasionally - mostly in the premium forums recently.

 

[nasa1974]

There are a handful of folks I miss from the mid 2000's that had some great posts and insight.

 

[Maricar19]

Expenses at age 65 – Medicare B 2021 $148.50
Question for those experiencing the “65 syndrome” –
Did you get a Medicare Supplement to cover the gap or expenses not covered by Medicare A and B?
Did you get a Medicare Supplement outside of FEHB?
Is it correct to assume that with Medicare A and B and a Medicare Supplement, your "out of pocket" cost is manageable$$?

Anybody with experience re: Medicare and supplemental?

 

[nnuut]

Anybody with experience re: Medicare and supplemental?

I use BCBS as a secondary to Medicare. They pay well, 99% of what Medicare will not pay. Of course I pay for the coverage, never payed anything.

 

[Kdjs]

I retired last year due to covid with Social Security Part A , Part B, and FEHB Blue Cross Blue Shiels Standard plan. The HR specialist was very helpful guiding me and to date there have been out of pocket expenses, no copays, or other miscellaneous expenses of any kind having several office visits and a few tests at a medical center.

Pharmacy costs have been none to very manageable. Able to compare with others for same or similar prescription cost and I paid $5.00 for Rx as prescribed vs someone with UnitedHealthcare plan F prescription plan paid over $15.00 and received a generic.

Wish you the best!