Can You Have Too Much in an HSA?

[markettracker]

Can you end up with too much money in an HSA?

Overly simplified hypothetical scenario:

$8000 annual contribution at 5% growth for 40 years will bring your balance to around a million dollars. Could easily be higher, as $8000 is below the current contribution limit, which will surely rise over time as well.

Is that too much? Should money be directed elsewhere once you hit a certain balance?

[lazynovice]

It doesn’t currently have an RMD so not quite as bad as an IRA. But you should look at the inheritance rules for non-spousal heirs. It is quite a tax bomb for them.

[Normchad]

It’s not something I worry about. I’m more worried about my already large and likely to grow even bigger, medical expenses. I currently have about $100K in the HSA, and it might eventually get to $300K or something. I figure I’ll be able to use a lot of it up for old age care. And if not, my heirs can worry about it after I’m dead.

[02nz]

Can you end up with too much money in an HSA?

Overly simplified hypothetical scenario:

$8000 annual contribution at 5% growth for 40 years will bring your balance to around a million dollars. Could easily be higher, as $8000 is below the current contribution limit, which will surely rise over time as well.

Is that too much? Should money be directed elsewhere once you hit a certain balance?

You're assuming, for starters, that you'll have an HSA-compatible HDHP plan for all 40 years. Employers and health plans change.

Even that aside, I don't think it's really possible to have "too much in an HSA," for these reasons:

- The list of reimbursable items includes some common everyday items you might not think of - e.g., fiber supplements, Epson salt, to name just a few items I found recently.
- You can pay Medicare premiums using an HSA.
- You can use HSA funds for LTC.
- After age 65 you can use an HSA like a traditional IRA, if you really cannot make use of the HSA funds.

Given the tax benefit, I think it's a no-brainer to put as much into the HSA as you can.

[mhc]

OP,

I wouldn't worry about it 40 years out. Maybe reevaluate every 10 years or so. Who knows what the future will be like.

[Mike Scott]

Maybe in theory given the inheritance rules so split it up if you want down the road.

We will not have 40 years accumulation in HSAs and I do not expect to accumulate more in the accounts than we are likely to have qualified expenses over the next few years. We reimburse annual expenses and I have no doubt that our medical costs will continue to deplete the HSA funds in a reasonable amount of time.

[Artsdoctor]

Can you end up with too much money in an HSA?

Overly simplified hypothetical scenario:

$8000 annual contribution at 5% growth for 40 years will bring your balance to around a million dollars. Could easily be higher, as $8000 is below the current contribution limit, which will surely rise over time as well.

Is that too much? Should money be directed elsewhere once you hit a certain balance?

This has been discussed many times in the past. It's unlikely you can have too much but there are some things to keep in mind.

Although your HSA is a very good investment account, make sure you're contributing to your employer-sponsored plan in order to get the match. After that, you can max out the plan and any other retirement account which would be beneficial. If you're doing all of that, and yet you can still max out your HSA and pay for your medical expenses out of a taxable account, then continue to max out the HSA as long as a HDHP makes sense for you. Keep your medical receipts along the way and if your balance balloons beyond your liking, you can then start reimbursing yourself. In retirement, you can always reimburse yourself and pay for all of your expenses (and Medicare premiums) out of your HSA account, you can withdraw it for non-medical expenses (and just pay income tax without penalties) and pass it along to your spouse after death. If you're charitably inclined, the surviving spouse can then give the balance to a charity (or donor advised fund) after death, thereby freeing up the remainder of the estate to heirs.

If you're contributing only $8,000 per year for decades and have millions later on, you've probably invested very well elsewhere and you'll have plenty of other estate planning decisions to make.

[VanguardInvestor1972]

Can you end up with too much money in an HSA?

Overly simplified hypothetical scenario:

$8000 annual contribution at 5% growth for 40 years will bring your balance to around a million dollars. Could easily be higher, as $8000 is below the current contribution limit, which will surely rise over time as well.

Is that too much? Should money be directed elsewhere once you hit a certain balance?

You're assuming, for starters, that you'll have an HSA-compatible HDHP plan for all 40 years. Employers and health plans change.

[...]

Given the tax benefit, I think it's a no-brainer to put as much into the HSA as you can.

This note above sums up my perspective. I had access to a HDHP / HSA set up with an employer for 7 years total. I switched employers 5 years ago with no such option. I maxed and invested while I could, saving receipts. The balance is now over $80,000. I wish I could contribute more but cannot. So I'd be in the camp of "put as much into the HSA as you can" while you can. You can always dial back. You may not be able to contribute at all (my case), or contribute the max, forever.

[wander]

No, you cannot have too much in an HSA. At 65, you can withdraw money like from an IRA.

[H-Town]

Can you end up with too much money in an HSA?

Overly simplified hypothetical scenario:

$8000 annual contribution at 5% growth for 40 years will bring your balance to around a million dollars. Could easily be higher, as $8000 is below the current contribution limit, which will surely rise over time as well.

Is that too much? Should money be directed elsewhere once you hit a certain balance?

The older you get, the better you know to take one year at a time. I’m sure at some point of your 40 years, you will need to seriously consider to move from HDHP to regular non-HDHP plan because of your health or your spouse or your children healthcare.

Trust me when I say this: take one year at a time. And be thankful for the year that you can max out HSA and invest the fund.

[sailaway]

I don't know many 25yos who are married and/or have a child *and* can afford to reach this max, without dipping into it for medical expenses in order to get all their max tax sheltered space. Even in tech. 40 years is a bit of strawman, although technically possible.

If you are concerned about too much in an HSA, you can always use it to pay medical expenses along the way. Then it doesn't compound. Megacorp has made this easy. From the insurance page you can set up bills to pay from your HSA via Instamed. DH does this for the convenience with his own bills and sometimes mine if he notices something when he logs in to pay his own. Since he reached the OOP max a few years in a row, we are not in any danger of having too much in the HSA.

[runner3081]

It doesn’t currently have an RMD so not quite as bad as an IRA. But you should look at the inheritance rules for non-spousal heirs. It is quite a tax bomb for them.

Yeah, but they still get money, so who cares?

[lazynovice]

It doesn’t currently have an RMD so not quite as bad as an IRA. But you should look at the inheritance rules for non-spousal heirs. It is quite a tax bomb for them.

Yeah, but they still get money, so who cares?

Someone who has seven figures in an HSA also is likely to have an estate that needs planning for. Not everyone is okay with letting their estate get eaten up by taxes even if you are.

[life in slices]

There is also an inflationary impact on the cost of medical costs 40 years out that have to be accounted for (and which a growing HSA balance will help with)

With even a target inflation of 2%, health care costs would have doubled by the end of that 40 year period

[Artsdoctor]

It doesn’t currently have an RMD so not quite as bad as an IRA. But you should look at the inheritance rules for non-spousal heirs. It is quite a tax bomb for them.

Yeah, but they still get money, so who cares?

I can easily understand and appreciate the sentiment. I think I probably would've had similar feelings many years ago.

However, I've now become the executor, the trustee, and the beneficiary of several friends and family members' estates who have passed on. I now have a few different thoughts:

1. Of course when you've died, you're not going to care much about taxes. But if you've worked many years and prize your ability to pass on your hard-earned assets to loved ones, you're probably not going to want to intentionally give more of those assets than you have to to the federal and state tax departments. Think about all of those years of work.

2. The people left behind will and should be grateful for all of your generosity. But how you leave your estate will be part of their memory of you as a person. There are a lot of variations on a theme, but for those who have passed on, I've run the gamut of "what an incredible gift to have someone prepare their estate so well" to "wow, what a wasted opportunity for . . . "

[runner3081]

It doesn’t currently have an RMD so not quite as bad as an IRA. But you should look at the inheritance rules for non-spousal heirs. It is quite a tax bomb for them.

Yeah, but they still get money, so who cares?

Someone who has seven figures in an HSA also is likely to have an estate that needs planning for. Not everyone is okay with letting their estate get eaten up by taxes even if you are.

So, if you max out all accounts, you are better off doing post-tax instead of an HSA to save your kids a few bucks, seems odd to me.

[lazynovice]

It doesn’t currently have an RMD so not quite as bad as an IRA. But you should look at the inheritance rules for non-spousal heirs. It is quite a tax bomb for them.

Yeah, but they still get money, so who cares?

Someone who has seven figures in an HSA also is likely to have an estate that needs planning for. Not everyone is okay with letting their estate get eaten up by taxes even if you are.

So, if you max out all accounts, you are better off doing post-tax instead of an HSA to save your kids a few bucks, seems odd to me.

Depends on your tax bracket when you are deferring and depends on theirs when you die.

Currently, the entire HSA is disbursed and included in their taxable income in the year of your death. Depending how many heirs are inheriting, you may push them into the top bracket and subject them to NIIT and disqualify them from various other credits.

A taxable account will get an automatic step up in basis which they can sell immediately if desired for $0 tax impact. You’ll have paid the tax on the initial investment upfront of course and taxes on the dividends along the way.

[gasdoc]

I realize you can try to push taxable income to the top of various brackets for tax efficiency but in general, where in the order would you withdraw from the HSA with saved receipts?

1) Regular brokerage accounts
2) HSA
3) Ira's and equivalent
4) Roth IRA's and equivalent?

Or would you maintain the HSA as long as possible, more like a ROTH, to take more advantage of tax free growth?

1) Regular brokerage accounts
2) IRA's and equivalent
3) HSA's
4 Roth IRA's and equivalent?

Much appreciated!

gasdoc

[invest4]

It’s not something I worry about. I’m more worried about my already large and likely to grow even bigger, medical expenses. I currently have about $100K in the HSA, and it might eventually get to $300K or something. I figure I’ll be able to use a lot of it up for old age care. And if not, my heirs can worry about it after I’m dead.

+1

[gasdoc]

It’s not something I worry about. I’m more worried about my already large and likely to grow even bigger, medical expenses. I currently have about $100K in the HSA, and it might eventually get to $300K or something. I figure I’ll be able to use a lot of it up for old age care. And if not, my heirs can worry about it after I’m dead.

+1

But what about the old saved medical receipts? You can't pass those on to your heirs? When would you use those for withdrawals?

gasdoc

[KlangFool]

Can you end up with too much money in an HSA?

Overly simplified hypothetical scenario:

$8000 annual contribution at 5% growth for 40 years will bring your balance to around a million dollars. Could easily be higher, as $8000 is below the current contribution limit, which will surely rise over time as well.

Is that too much? Should money be directed elsewhere once you hit a certain balance?

markettracker,

Are you lucky enough to do not have to use this money for 40 years and can contribute 8K per year?

Why do you think that you are that lucky?

I know that I am not.

KlangFool

[secondcor521]

It’s not something I worry about. I’m more worried about my already large and likely to grow even bigger, medical expenses. I currently have about $100K in the HSA, and it might eventually get to $300K or something. I figure I’ll be able to use a lot of it up for old age care. And if not, my heirs can worry about it after I’m dead.

+1

But what about the old saved medical receipts? You can't pass those on to your heirs? When would you use those for withdrawals?

gasdoc

No, you can't pass old saved medical receipts. From an HSA perspective, those become useless if you die and they were eligible but unreimbursed medical expenses. (If they represent medical expenses in the year of your death, they would qualify as Schedule A itemized medical deductions in excess of 7.5% of AGI, of course.)

Your heirs can use any medical bills of yours that they pay after you die to reduce the taxability of the inherited HSA funds.

Because of the above, plus the "entire balance taxable upon inheritance" rule, I plan to try to drain my HSA before I die.

See IRS Pub 969 for details.

[markettracker]

Can you end up with too much money in an HSA?

Overly simplified hypothetical scenario:

$8000 annual contribution at 5% growth for 40 years will bring your balance to around a million dollars. Could easily be higher, as $8000 is below the current contribution limit, which will surely rise over time as well.

Is that too much? Should money be directed elsewhere once you hit a certain balance?

markettracker,

Are you lucky enough to do not have to use this money for 40 years and can contribute 8K per year?

Why do you think that you are that lucky?

I know that I am not.

KlangFool

Nor am I, this was a hypothetical scenario. But it does seem HSA’s are considered to be one of the highest priorities for savings accounts. The bogleheads wiki puts it right after getting your employer 401k match. So worth pondering if that holds true indefinitely or if there were some practical limits. I have found the responses here educational.

[markettracker]

You're assuming, for starters, that you'll have an HSA-compatible HDHP plan for all 40 years. Employers and health plans change.

Very true, although in my anecdotal experience there seems to be a trend towards HDHP / HSA plans from employers.

[furwut]

You can’t favorably convert excess HSA to a Roth.

[gasdoc]

It’s not something I worry about. I’m more worried about my already large and likely to grow even bigger, medical expenses. I currently have about $100K in the HSA, and it might eventually get to $300K or something. I figure I’ll be able to use a lot of it up for old age care. And if not, my heirs can worry about it after I’m dead.

+1

But what about the old saved medical receipts? You can't pass those on to your heirs? When would you use those for withdrawals?

gasdoc

No, you can't pass old saved medical receipts. From an HSA perspective, those become useless if you die and they were eligible but unreimbursed medical expenses. (If they represent medical expenses in the year of your death, they would qualify as Schedule A itemized medical deductions in excess of 7.5% of AGI, of course.)

Your heirs can use any medical bills of yours that they pay after you die to reduce the taxability of the inherited HSA funds.

Because of the above, plus the "entire balance taxable upon inheritance" rule, I plan to try to drain my HSA before I die.

See IRS Pub 969 for details.

Thank you for the CPA perspective.

gasdoc

[Silverado]

It doesn’t currently have an RMD so not quite as bad as an IRA. But you should look at the inheritance rules for non-spousal heirs. It is quite a tax bomb for them.

Yeah, but they still get money, so who cares?

I’m with you, though our entire estate goes to a charity.

[bling]

https://www.bogleheads.org/wiki/Priorit ... nvestments

HSA comes after 401k. so if you've maxed out your HSA for 40 years that means you've either already maxed out your 401k or just enough to get a match. in both cases, you + employer are basically contributing at least 2x into your 401k vs HSA.

assuming the minimum, you'll have 2 million in your 401k and 1 million in your HSA, in today's dollars.

that doesn't sound like a lot of money to me....long-term care will eat all of that up in a couple years.

[David Jay]

Because of the above, plus the "entire balance taxable upon inheritance" rule, I plan to try to drain my HSA before I die.

HSA funds can be used to pay Medicare Part B premiums (roughly $4000 a year for married couple), so I’m also spending down my HSA.

[dukeblue219]

You can make similar statements about 401ks or IRAs maxed when you start assuming high real returns indefinitely. See the thread about putting $10k in a kid's Roth and watching it grow for 70 years to something like a trillion dollars.

It's pretty implausible *to me* that we'll see annualized 5% real returns for the next 40 years.

[sc9182]

Projection are just that - Projections; especially 40-years uninterrupted!! Such things - Never going to materialize, let alone to the extent being-projected-to in real-life. Too many hiccups (not just markets, but personal/professional/family) along the way to derail such Over-optimistic 4-decade projections!

Save receipts - start to reimburse/withdraw-like-Roth around age 65-70 .. while possibly Roth-convert prior to Double delayed Max-SS ! We would leave decent chunk towards possible LTC needs, IRA funds, and/or possibility consider towards charity.

And there is a role for some amounts of Term/level-term life-insurance at least until age-70 delayed SS start or slightly longer. Non-taxed life-insurance proceeds help towards absorbing any potential tax-hit (of HSA turning into IRA) and/or possible loss of never-withdrawn such delayed-SS.

[humblecoder]

I think people are getting side tracked by the hypothetical example and are focused on knocking that down that straw man. However, I think the question the OP is trying to ask is is there is a point where you can have "too much" in an HSA.

Some points to consider:
1. When you under age 65, you cannot take the money out unless you have a qualified medical expense. If the amount in the HSA is great enough such that you don't have enough medical expenses to reimburse yourself, then the money is essentially stuck in the HSA. Well, technically not stuck, but on a non-qualified withdrawal, you would pay ordinary income taxes PLUS a 20% penalty (worse than the IRA/401k penalty).

2. After age 65, non-qualified withdrawals are taxed as ordinary income, but the penalty goes away. Therefore it is treated like a Traditional IRA. However, note that the age where the early withdrawal penalty goes away is 5.5 years LATER than that of an IRA.

3. The tax rules for HSA's inherited by a non-spouse are not favorable. Unlike an inherited IRA where you are allowed to take distributions over a several year period, the inherited HSA becomes taxable immediately. Big tax bomb!

4. Several states do not recognize HSA and treat them as a normal taxable account.

So while there is no rule of thumb for how much is too much that I am aware of, there are some things to consider as you decide whether or not to contribute to an HSA versus other savings vehicles.

[02nz]

You can’t favorably convert excess HSA to a Roth.

Why would you need to, when there are so many ways to use the money "triple tax-free"? That's much more favorable than any Roth conversion (except one done at 0% tax).

[JD2775]

Can you end up with too much money in an HSA?

Overly simplified hypothetical scenario:

$8000 annual contribution at 5% growth for 40 years will bring your balance to around a million dollars. Could easily be higher, as $8000 is below the current contribution limit, which will surely rise over time as well.

Is that too much? Should money be directed elsewhere once you hit a certain balance?

You're assuming, for starters, that you'll have an HSA-compatible HDHP plan for all 40 years. Employers and health plans change.

Even that aside, I don't think it's really possible to have "too much in an HSA," for these reasons:

- The list of reimbursable items includes some common everyday items you might not think of - e.g., fiber supplements, Epson salt, to name just a few items I found recently.
- You can pay Medicare premiums using an HSA.
- You can use HSA funds for LTC.
- After age 65 you can use an HSA like a traditional IRA, if you really cannot make use of the HSA funds.

Given the tax benefit, I think it's a no-brainer to put as much into the HSA as you can.

You can use HSA for LTC? I thought I you couldn't. That is great, if so.

[Grogs]

I hope to retire in a few years in my mid-50s. If current policies don't change, I'll be able to keep the same HDHP+HSA as part of my retiree medical. In that case, I plan to use the HSA as a tax-free pass through every year: I'll contribute the max ~$4k to the HSA and then pull for current medical expenses or based on previous receipts. The money contributed to the HSA will lower taxable income and give me more space in the 12/15% bracket for doing Roth conversions from my 401k. Once I hit 65 and shift over to Medicare, I can no longer contribute to the HSA, so I'll start drawing it down to pay medical expenses and premiums from there on out.

[jjbychko]

You should be spending it on your deductibles for medical, dental and vision. When you start Medicare you can use the HSA to pay for your Medicare premiums. Post 65 you can use your HSA for anything but if its non-medical you must treat it as income similar to an IRA.

[02nz]

Can you end up with too much money in an HSA?

Overly simplified hypothetical scenario:

$8000 annual contribution at 5% growth for 40 years will bring your balance to around a million dollars. Could easily be higher, as $8000 is below the current contribution limit, which will surely rise over time as well.

Is that too much? Should money be directed elsewhere once you hit a certain balance?

You're assuming, for starters, that you'll have an HSA-compatible HDHP plan for all 40 years. Employers and health plans change.

Even that aside, I don't think it's really possible to have "too much in an HSA," for these reasons:

- The list of reimbursable items includes some common everyday items you might not think of - e.g., fiber supplements, Epson salt, to name just a few items I found recently.
- You can pay Medicare premiums using an HSA.
- You can use HSA funds for LTC.
- After age 65 you can use an HSA like a traditional IRA, if you really cannot make use of the HSA funds.

Given the tax benefit, I think it's a no-brainer to put as much into the HSA as you can.

You can use HSA for LTC? I thought I you couldn't. That is great, if so.

The details are in IRS Pub 502. Basically, as with any other expense, those related to caring for a person's medical conditions are eligible, things like regular meals are not. LTC insurance premiums are HSA-reimbursable.

[PaddyMac]

We're self-employed and on the ACA, so access to an HSA comes and goes. We had good access for a few years and built up a nice balance of about $70K. One big surgery and a stair-lift later, it's down to about $50K. My plan is to use it as a medical reserve fund in our sixties. What I find useful is that I can budget X amount for health care each year, and if it goes above my budget, I'll withdraw from the HSA. Helps with smoothing out expenses.

Also, next year we are doing a big remodel, and will have to withdraw a lot from tax-deferred. So I will use some of our old medical receipts to withdraw to keep us in a lower tax bracket.

I've now begun to think of the HSA like Roth space - after all, the tax deductions we received are history, all that matters is that withdrawals are tax free. However, they have to be matched with medical receipts so that is a complication. So it's probably better for us to draw down the HSA in our sixties rather than draw down the Roths (which are more flexible).

IMO, it's hard to have too much in an HSA. It's by far the best deal for taxes.

[secondcor521]

Thank you for the CPA perspective.

gasdoc

Not a CPA, but you're welcome.

[White Coat Investor]

Can you end up with too much money in an HSA?

Overly simplified hypothetical scenario:

$8000 annual contribution at 5% growth for 40 years will bring your balance to around a million dollars. Could easily be higher, as $8000 is below the current contribution limit, which will surely rise over time as well.

Is that too much? Should money be directed elsewhere once you hit a certain balance?

No. I've got something like $160K in an HSA and I'm still making annual contributions. What we don't use on health care during our lives will go to charity.

If you're not charitably inclined, you can use what you don't spend on health care on anything else penalty-free (but not tax-free) after age 65. You can even leave it to heirs, but it'll be fully taxable to them in the year you die.

Now if making that HSA contribution is keeping you from reaching some other financial goal (college or retirement savings or whatever) then sure, you can overcontribute. But otherwise, no.

[White Coat Investor]

Projection are just that - Projections; especially 40-years uninterrupted!! Such things - Never going to materialize, let alone to the extent being-projected-to in real-life. Too many hiccups (not just markets, but personal/professional/family) along the way to derail such Over-optimistic 4-decade projections!

They'll likely come true for many people. Maybe not 40 years, but we've been contributing to a 100% equity HSA for 14 years straight now and never taken a withdrawal. My XIRR for that account is 9.91%. $8,000 at 10% for 20 years is $458K. For 30 years it's $1.3M. I wouldn't be surprised at all if I die with a 7 figure HSA.

[nyclon]

Does the HSA still make sense in a situation where someone is retired and drawing all income from taxable dividends / long term capital gains while on an ACA plan?

That would mean they’re paying up to 23.8% (ltcg+niit) on contributions. Or are they better off getting an “easy pricing” non-HSA ACA plan with lower premiums and more predictable costs?

This would be an early retiree (40s/50s) who’s not planning to withdraw for a few decades.

[ModifiedDuration]

There is so much you can use the HSA funds for tax free:

Medicare premiums, including IRMAA (but not Medigap
premiums)
Deductibles, copays, coinsurance
Vision
Dental
Hearing
Long-term care insurance (within IRS guidelines)
Long-term care expenses
Over-the-counter, such as allergy medicine, ibuprofen, first aid drugs and medicines, sunscreen (SPF 15 or higher) bandages, etc.

[sc9182]

Projection are just that - Projections; especially 40-years uninterrupted!! Such things - Never going to materialize, let alone to the extent being-projected-to in real-life. Too many hiccups (not just markets, but personal/professional/family) along the way to derail such Over-optimistic 4-decade projections!

They'll likely come true for many people. Maybe not 40 years, but we've been contributing to a 100% equity HSA for 14 years straight now and never taken a withdrawal. My XIRR for that account is 9.91%. $8,000 at 10% for 20 years is $458K. For 30 years it's $1.3M. I wouldn't be surprised at all if I die with a 7 figure HSA.

lol, agree - for highly successful/stable income folks - it’s not just HSA, but their “Self-employed 401k”, “defined-contribution” and possibly topped-up 529 amounts could get 5-10x times as large as a topped-up HSA — if those retirement plans also gets max-contributions, and uninterrupted growth over 3-4 decades! Those will pose much bigger challenge at that point than maxed-HSA account

If our accounts do indeed reach ginormous size, may be Club-Med in some far-way exotic location has some special treatments to offer for self+spouse/helper — to
pay-for and heal that go-go/slow-go years exotic illness !!

Then again, we would rather have near 8-figure IRA/retirement account balances - and worry a little about high-taxes than eking out our retirement on US-mean retirement savings

However do agree - one ought to know when to trim/limit to size — as accounts if/indeed grow quite large !!

[LotsaGray]

Projection are just that - Projections; especially 40-years uninterrupted!! Such things - Never going to materialize, let alone to the extent being-projected-to in real-life. Too many hiccups (not just markets, but personal/professional/family) along the way to derail such Over-optimistic 4-decade projections!

They'll likely come true for many people. Maybe not 40 years, but we've been contributing to a 100% equity HSA for 14 years straight now and never taken a withdrawal. My XIRR for that account is 9.91%. $8,000 at 10% for 20 years is $458K. For 30 years it's $1.3M. I wouldn't be surprised at all if I die with a 7 figure HSA.

lol, agree - for highly successful/stable income folks - it’s not just HSA, but their “Self-employed 401k”, “defined-contribution” and possibly topped-up 529 amounts could get 5-10x times as large as a topped-up HSA — if those retirement plans also gets max-contributions, and uninterrupted growth over 3-4 decades! Those will pose much bigger challenge at that point than maxed-HSA account

If our accounts do indeed reach ginormous size, may be Club-Med in some far-way exotic location has some special treatments to offer for self+spouse/helper — to
pay-for and heal that go-go/slow-go years exotic illness !!

Then again, we would rather have near 8-figure IRA/retirement account balances - and worry a little about high-taxes than eking out our retirement on US-mean retirement savings

However do agree - one ought to know when to trim/limit to size — as accounts if/indeed grow quite large !!

You do realize that once you reach 65, the HSA is effectively a tIRA+. That is you have all the HSA options but you c@n also take taxable distributions just like a tIRA.

[gasdoc]

https://www.bogleheads.org/wiki/Priorit ... nvestments

HSA comes after 401k. so if you've maxed out your HSA for 40 years that means you've either already maxed out your 401k or just enough to get a match. in both cases, you + employer are basically contributing at least 2x into your 401k vs HSA.

assuming the minimum, you'll have 2 million in your 401k and 1 million in your HSA, in today's dollars.

that doesn't sound like a lot of money to me....long-term care will eat all of that up in a couple years.

Thank you. I wasn't aware of this wiki info.

gasdoc

[Artsdoctor]

There is so much you can use the HSA funds for tax free:

Medicare premiums, including IRMAA (but not Medigap
premiums)
Deductibles, copays, coinsurance
Vision
Dental
Hearing
Long-term care insurance (within IRS guidelines)
Long-term care expenses
Over-the-counter, such as allergy medicine, ibuprofen, first aid drugs and medicines, sunscreen (SPF 15 or higher) bandages, etc.

Agree fully. And, if you've kept receipts from all of those years of unreimbursed medical expenses, you can "just happen to" withdraw amounts for reimbursement that equal your Medigap premiums, too (meaning, you can't use your HSA for Medigap premiums but you can reimburse yourself for prior expenses anytime you'd like).

But you're right. Tons of things to spend money on, even all of those things you do to your house for medical purposes, and those home health aides that come to keep you in your home for longer. These things can really add up very fast.

[LotsaGray]

https://www.bogleheads.org/wiki/Priorit ... nvestments

HSA comes after 401k. so if you've maxed out your HSA for 40 years that means you've either already maxed out your 401k or just enough to get a match. in both cases, you + employer are basically contributing at least 2x into your 401k vs HSA.

assuming the minimum, you'll have 2 million in your 401k and 1 million in your HSA, in today's dollars.

that doesn't sound like a lot of money to me....long-term care will eat all of that up in a couple years.

Paying $125K per month got LTC is quite rare

[bling]

https://www.bogleheads.org/wiki/Priorit ... nvestments

HSA comes after 401k. so if you've maxed out your HSA for 40 years that means you've either already maxed out your 401k or just enough to get a match. in both cases, you + employer are basically contributing at least 2x into your 401k vs HSA.

assuming the minimum, you'll have 2 million in your 401k and 1 million in your HSA, in today's dollars.

that doesn't sound like a lot of money to me....long-term care will eat all of that up in a couple years.

Paying $125K per month got LTC is quite rare

here's a neat calculator i found: https://www.genworth.com/aging-and-you/ ... -care.html

adjusted for inflation, 3mil really isn't that impressive in 40 years.

[LotsaGray]

https://www.bogleheads.org/wiki/Priorit ... nvestments

HSA comes after 401k. so if you've maxed out your HSA for 40 years that means you've either already maxed out your 401k or just enough to get a match. in both cases, you + employer are basically contributing at least 2x into your 401k vs HSA.

assuming the minimum, you'll have 2 million in your 401k and 1 million in your HSA, in today's dollars.

that doesn't sound like a lot of money to me....long-term care will eat all of that up in a couple years.

Paying $125K per month got LTC is quite rare

here's a neat calculator i found: https://www.genworth.com/aging-and-you/ ... -care.html

adjusted for inflation, 3mil really isn't that impressive in 40 years.

Still shows six plus years and six plus years of care at highest rate is quite unlikely. It still is 3x your claim. Yes LTC is very expensive out of pocket but even “just” a million goes quite far. Do you know how long the median time in nursing care? With 5 yr clawback you could shelter $360K even if you did nothing until you entered care.