Hello everyone:
I just read a private IRS ruling to a taxpayer company that they may have ability to direct Company match on 401K to other avenues such as student debt, HRA or HSA. See below link. First I am hearing of this option even.
https://www.irs.gov/pub/irs-wd/202434006.pdf
To keep this from getting blocked and actionable — would it not be better then to put the match into HSA since that can grow tax free? This assumes you don’t have a need for those money in other debt clearing situations. What am I missing?
Potential for 401K match to be directed to other accounts
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- Posts: 72
- Joined: Sat Jan 05, 2019 10:41 am
Re: Potential for 401K match to be directed to other accounts
Only if you cannot otherwise max the HSA (even if you end up withdrawing to pay medical bills). If you can max the HSA, redirecting the match would artificially limit the amount of tax sheltered space you have available.
Re: Potential for 401K match to be directed to other accounts
Using the HSA you risk having to spend that match before retirement on healthcare.