HSA Catch-up contribution - Timing question

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KingRiggs
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HSA Catch-up contribution - Timing question

Post by KingRiggs » Mon Jan 13, 2020 9:22 am

I have a HDHP which covers the entire family, including my spouse. Up to now, have been doing the maximum family contribution to the HSA which is in my name at Fidelity.

DW turns 55 late this year, so will be eligible for catch-up contribution of $1,000. I understand this must be made to an HSA account in HER name. Do we have to wait until her birthday to contribute, or can we front-load the contribution since she will be 55 by end-of-year? Same situation will apply to me next year, so figure I should get the answer now...

Thanks!
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RickBoglehead
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Re: HSA Catch-up contribution - Timing question

Post by RickBoglehead » Mon Jan 13, 2020 9:24 am

You can make the contribution at any time during the year you qualify for the catch-up contribution. However, should you leave that plan before you turn 55, I would assume that would be an over contribution.
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KingRiggs
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Re: HSA Catch-up contribution - Timing question

Post by KingRiggs » Mon Jan 13, 2020 9:33 am

Thanks, Rick.

I suppose that is the risk one takes with front-loading an HSA contribution.

(Also glad to see we agree on the advise/advice issue! :twisted: )
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TBL_IA
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Re: HSA Catch-up contribution - Timing question

Post by TBL_IA » Mon Jan 13, 2020 9:34 am

https://thefinancebuff.com/hsa-contribution-limits.html

From reading this it appears only you are able to make the catch-up contribution since it is in your name. Your wife would need to have her own HSA for the catch-up contribution.

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RickBoglehead
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Re: HSA Catch-up contribution - Timing question

Post by RickBoglehead » Mon Jan 13, 2020 9:35 am

TBL_IA wrote:
Mon Jan 13, 2020 9:34 am
https://thefinancebuff.com/hsa-contribution-limits.html

From reading this it appears only you are able to make the catch-up contribution since it is in your name. Your wife would need to have her own HSA for the catch-up contribution.
Which he noted in his original post.
Avid user of forums on variety of interests-financial, home brewing, F-150, PHEV, home repair, etc. Enjoy learning & passing on knowledge. It's PRINCIPAL, not PRINCIPLE. I ADVISE you to seek ADVICE.

TBL_IA
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Re: HSA Catch-up contribution - Timing question

Post by TBL_IA » Mon Jan 13, 2020 9:36 am

RickBoglehead wrote:
Mon Jan 13, 2020 9:35 am
TBL_IA wrote:
Mon Jan 13, 2020 9:34 am
https://thefinancebuff.com/hsa-contribution-limits.html

From reading this it appears only you are able to make the catch-up contribution since it is in your name. Your wife would need to have her own HSA for the catch-up contribution.
Which he noted in his original post.
Just reread his post. Disregard. Thanks for answering his question

Spirit Rider
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Re: HSA Catch-up contribution - Timing question

Post by Spirit Rider » Mon Jan 13, 2020 9:40 am

Basic HSA catch-up contribution eligibility is based on the year you turn 55. Like all HSA contributions the amount of the catch-up is pro-rated by months of eligibility unless the last-month rule is used.

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KingRiggs
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Re: HSA Catch-up contribution - Timing question

Post by KingRiggs » Mon Jan 13, 2020 10:59 am

Spirit Rider wrote:
Mon Jan 13, 2020 9:40 am
Basic HSA catch-up contribution eligibility is based on the year you turn 55. Like all HSA contributions the amount of the catch-up is pro-rated by months of eligibility unless the last-month rule is used.
So if she was covered by the HDHP all year, but turns 55 in late November, she's only entitled to do a catch-up of 1,000 x (1/12) = $83?

I had not seen any language to that effect in other searches. It usually just states that the person is eligible to make catch-up contributions "in the year they turn 55"... :confused
Advice = noun | Advise = verb | | Roth, not ROTH

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KingRiggs
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Re: HSA Catch-up contribution - Timing question

Post by KingRiggs » Mon Jan 13, 2020 11:01 am

Found this:

"Federal rules permit "catch-up"? contributions to HSAs if an individual is 55 or older, allowing an increase in annual contributions up to an additional $1,000 per year. Individuals are eligible for this extra contribution if one is 55 years or older or turning 55 anytime during that year. "
Advice = noun | Advise = verb | | Roth, not ROTH

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KingRiggs
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Re: HSA Catch-up contribution - Timing question

Post by KingRiggs » Mon Jan 13, 2020 11:02 am

And this:

"If you're enrolled in a qualifying high-deductible health plan (HDHP) for the entire plan year, you're eligible to contribute the full $1,000 catch-up amount, no matter when your birthday is. Yes, even if your birthday falls on New Year's Eve.

Even better, if you only enrolled in an HDHP for part of the year, you can still prorate the catch-up amount by the number of months you had qualifying coverage, as long as you turn 55 before the end of the year."

It would appear that she can make the full catch-up contribution.
Advice = noun | Advise = verb | | Roth, not ROTH

Spirit Rider
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Re: HSA Catch-up contribution - Timing question

Post by Spirit Rider » Mon Jan 13, 2020 11:05 am

KingRiggs wrote:
Mon Jan 13, 2020 10:59 am
Spirit Rider wrote:
Mon Jan 13, 2020 9:40 am
Basic HSA catch-up contribution eligibility is based on the year you turn 55. Like all HSA contributions the amount of the catch-up is pro-rated by months of eligibility unless the last-month rule is used.
So if she was covered by the HDHP all year, but turns 55 in late November, she's only entitled to do a catch-up of 1,000 x (1/12) = $83?

I had not seen any language to that effect in other searches. It usually just states that the person is eligible to make catch-up contributions "in the year they turn 55"... :confused
No.

As I pointed out. The basic HSA catch-up eligibility is that you are >= age 55 at any time during the tax year. When her birthday is in the year she turns 55 is irrelevant. Only her months of eligibility matters.

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KingRiggs
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Re: HSA Catch-up contribution - Timing question

Post by KingRiggs » Mon Jan 13, 2020 11:10 am

Spirit Rider wrote:
Mon Jan 13, 2020 11:05 am
KingRiggs wrote:
Mon Jan 13, 2020 10:59 am
Spirit Rider wrote:
Mon Jan 13, 2020 9:40 am
Basic HSA catch-up contribution eligibility is based on the year you turn 55. Like all HSA contributions the amount of the catch-up is pro-rated by months of eligibility unless the last-month rule is used.
So if she was covered by the HDHP all year, but turns 55 in late November, she's only entitled to do a catch-up of 1,000 x (1/12) = $83?

I had not seen any language to that effect in other searches. It usually just states that the person is eligible to make catch-up contributions "in the year they turn 55"... :confused
No.

As I pointed out. The basic HSA catch-up eligibility is that you are >= age 55 at any time during the tax year. When her birthday is in the year she turns 55 is irrelevant. Only her months of eligibility matters.
Thanks. I read your reply to mean she was only "eligible" for the months of the year she is 55+. Understand now. Appreciate the input! :sharebeer
Advice = noun | Advise = verb | | Roth, not ROTH

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