Retirement thread

[crash_zone]

I would be curious how many actually have one. I can only get access at work if I switch to the high deductible plan.

That's part of the deal right now - only qualify for HSA's with a high deductible plan....but if you are healthy or always hit you max out of pocket, the high deductible plans work well.

Most people that do have HSA's withdrawal their expenses out each year - if you don't NEED the money, that is a mistake.

 

[cowgirl836]

That's part of the deal right now - only qualify for HSA's with a high deductible plan....but if you are healthy or always hit you max out of pocket, the high deductible plans work well.

Most people that do have HSA's withdrawal their expenses out each year - if you don't NEED the money, that is a mistake.

this is the first year they've even offered it, wasn't interested in that plan (as we expect some medical expenses the next few years) so I didn't ask a lot about it. Plus the person I had to meet with (they outsourced a bunch of benefits stuff this year) didn't seem to know basic stuff like what is the year for the deductible now.

 

[Cyclonepride]

Our financial advisor put together an analysis that assessed our current ages, resources and intended contributions (along with our intended ages of retirement) and came up with an age range where we'd run out of money. Obviously that is contingent upon a lot of things continuing as they are, or as they are projected to be, but it was interesting and useful.

 

[throwittoblythe]

this is the first year they've even offered it, wasn't interested in that plan (as we expect some medical expenses the next few years) so I didn't ask a lot about it. Plus the person I had to meet with (they outsourced a bunch of benefits stuff this year) didn't seem to know basic stuff like what is the year for the deductible now.

The company I worked for in 2010 added a high deductible plan back then. I initially passed it up because we thought we were going to be having a baby that year and their HSA plan didn't make financial sense for expensive medical events like that. A friend of mine who was years away from having children enrolled in the HSA right away. By the time he and his wife had kids years later, he had enough to pay for all the expenses out of his HSA account and paid for lasik along the way. We've since enrolled in an HSA and it's worked well for us so far. We have enough in our account to cover 2x our deductible and are just shy of covering a years out of pocket maximum.

One thing I did not realize about HSAs until I enrolled was that you don't have to have 100% of the money to cover a specific event in your HSA account in order to get the tax benefits. If you start 2018 in an HSA with $0 and you break your leg on Jan 2, you can still utilize the HSA tax advantages. You would pay the deductible and costs out of pocket, but then you can pay yourself back with the HSA throughout the year. So, effectively, you still get the tax-free benefit of the HSA for an event that occurred when you had $0 in your HSA.

 

[JY07]

I don't think you'd be able to do it until you'd leave your job(s) and transferred your 401k's to IRA's

If your provider allows for in service transfers you can: if they're all about the $$$ and are only offering expensive funds, it's less likely they'd allow that to be an option, but it can't hurt to check.

As far as the HSA goes, I max that out after my SEP-IRA and Roth IRA: most of the time you're better off with a high deductible plan (there are plenty of example scenarios on the internet), but I think most people avoid it thinking it's riskier than it actually is.

 

[BCClone]

My high deductible plan for myself and three kids is roughly 11,000/year with a 3500 deductible. Last we checked (couple years ago) my wife's plan to go from single to family was 1200/month. Her gets a single plan 100% paid. I assume her plan has increased but only going with what I know. When I utilize the HSA we are $$ ahead even maxing out everything versus never going to the doctor on the wife's

 

[SCNCY]

For those of you that have spreadsheets that you use for planning, are they available online?

 

[dmclone]

For those of you that have spreadsheets that you use for planning, are they available online?

Probably not what your asking for but I use Google docs to create a spreadsheet with my net worth, each tab is another year. Then I just use retirement calculators.

Something like this

 

[cowgirl836]

The company I worked for in 2010 added a high deductible plan back then. I initially passed it up because we thought we were going to be having a baby that year and their HSA plan didn't make financial sense for expensive medical events like that. A friend of mine who was years away from having children enrolled in the HSA right away. By the time he and his wife had kids years later, he had enough to pay for all the expenses out of his HSA account and paid for lasik along the way. We've since enrolled in an HSA and it's worked well for us so far. We have enough in our account to cover 2x our deductible and are just shy of covering a years out of pocket maximum.

One thing I did not realize about HSAs until I enrolled was that you don't have to have 100% of the money to cover a specific event in your HSA account in order to get the tax benefits. If you start 2018 in an HSA with $0 and you break your leg on Jan 2, you can still utilize the HSA tax advantages. You would pay the deductible and costs out of pocket, but then you can pay yourself back with the HSA throughout the year. So, effectively, you still get the tax-free benefit of the HSA for an event that occurred when you had $0 in your HSA.

looking at some of the details, the high deductible would save me about $30/month in premiums, but the deductible and OOP max double. Maybe that's quite typical, but I'm pretty risk-averse so I'd rather play it safe and focus on increasing contributions to my Roth instead.

 

[cowgirl836]

For those of you that have spreadsheets that you use for planning, are they available online?

this is what we used to figure out our fund allocations. This should link to a directions document that links to a read-only spreadsheet with sample data you can save a copy of. It's more for the Bogleheads approach of a three-fund portfolio.

https://docs.google.com/document/d/1flFvfKIcgmbIJgSTCzrcWIkztJUQiNYNe-RgMV4h_ag/edit

 

[4theCYcle]

I've decided when I retire I am just going to sit around and watch tv to catch up for all the years I missed while working. I shouldn't need to much for that.

All that you've missed are reality shows and Lavar Ball...

 

[CtownCyclone]

Probably not what your asking for but I use Google docs to create a spreadsheet with my net worth, each tab is another year. Then I just use retirement calculators.

Something like this

Nice mortgage rate and term, homie.

 

[throwittoblythe]

looking at some of the details, the high deductible would save me about $30/month in premiums, but the deductible and OOP max double. Maybe that's quite typical, but I'm pretty risk-averse so I'd rather play it safe and focus on increasing contributions to my Roth instead.

Agreed. Everyone has to square with what fits them best. At my last company, the difference in premiums & deductibles was offset by the matching money my employer put in my HSA account. If you compared the two plans, the HSA only made financial sense if you maxed out your contribution and you factored in the tax savings by doing that. Otherwise, it made more sense to stick with what they called the "traditional plan."

The tax savings you get by using HSA is something to consider when you're comparing plans. I've talked to people who only consider the deductibles and premiums, but leave out the tax portion which can be a deciding factor if you include it.

 

[cowgirl836]

Agreed. Everyone has to square with what fits them best. At my last company, the difference in premiums & deductibles was offset by the matching money my employer put in my HSA account. If you compared the two plans, the HSA only made financial sense if you maxed out your contribution and you factored in the tax savings by doing that. Otherwise, it made more sense to stick with what they called the "traditional plan."

The tax savings you get by using HSA is something to consider when you're comparing plans. I've talked to people who only consider the deductibles and premiums, but leave out the tax portion which can be a deciding factor if you include it.

forgot about the company HSA contribution. That would push it to $60 difference.

 

[cycloneworld]

Net result is that quality health insurance is a much bigger issue for us now - and there's no telling what Medicare will be like in three years. It will be different than what you encountered, and will doubtless change many times before the current crop of 20-somethings start retiring.

I'll try not to make this political but this is why health care is an important topic to me. I know two families directly that are in their mid 50s that COULD retire financially but they continue working for health insurance benefits because costs are outrageous. And I know someone else who really wants to start their own business but healthcare plan costs are holding him back. That's insane to me that people can't enjoy their retirement or start their own business because healthcare costs and insurance are out of control.

 

[throwittoblythe]

forgot about the company HSA contribution. That would push it to $60 difference.

I'll just use myself as an example. The 2017 HSA contribution limits for a family is $6750. My employer puts in $1200, so I can put in up to $5550 of my own money. Conservatively, if I assume a 15% tax rate, that saves me $832.50 a year in taxes. So, even though the HSA has a higher deductible and OOPM, it has lower premiums (I save $572/yr in premiums), plus $1200 HSA money, plus $832.50 in tax savings assuming I max it out.

All those benefits add up to about $2600 in funds that I have because I went with the HSA plan. The HSA plan has a deductible that is $900 higher and an OOPM that is $2,000 higher. Based on my math, the HSA works for me. At worst, if I max out through in a given year, I'm only $300 behind the other plan.

Again, not saying the HSA is the way to go for everyone. This is just the exercise I went through to decide. I haven't looked into it much, but my expectation is that HSAs are somehow better for the employer than "traditional plans" so they seem to incentivize the HSA plan.

 

[dmclone]

I know very little about health insurance but my wife works in the field and she told me that HSA's tend to be good for those that use it very little or those that use it a ton and hit their deductibles early. I don't know if that applies to just my HSA. I've had an HSA for at least 5 years and have never used it once (not a fan of going to the doctor) but I have used it to buy my wife's glasses.

 

[crash_zone]

There was a report out a few weeks ago that stated how much more money is in HSA's now. There were a handful of accounts above 100k, and several thousand accounts above 50k.

I wish one of the big financial firms would become HSA administrators (vanguard or Schwab) - set zero admin fees and only alow 1 withdrawal a yr or something like that. Seems like all the administrators require a set cash holding and have fees on top. With big HSA accounts, you'd think that it would become attractive to them at some point.

 

[VeloClone]

My employer started making HSAs available about 10 years ago. They did mention that there are cost savings to the employer as well as the employee. At first I had money going into my HSA which I keep for retirement medical expenses. When they introduced our high deductible insurance plan the employer started putting money in a VEBA account (balance carries over from year to year) to help the employee cover deductibles and OOP expenses. I also put money in our cafeteria account for planned annual medical expenses (balance does not carry over from year to year). I have changed jobs so my eligibility for the HSA has ended but I still max out my cafeteria account so my VEBA can grow.

Another thing to look at is how your income level might make you ineligible for some tax breaks. Keeping your taxable income down by putting as much as you can away before taxes can help you qualify for more tax advantages beyond just the taxes you pay directly on those dollars.

 

[2forISU]

Obviously there is many opinions on the right approach. Keep it simple, push yourself to start saving immediately and live cheap in your earlier years. If you do that, you won't have issues picking your retirement date. I have never heard anyone say, "I saved too much or started saving too early." The earlier the better!