Viewing a single comment thread. View all comments

FantasticInvestor t1_iyaupiv wrote

Reply to comment by KookyKrista in I don't see the point of my employer's HDHP /w HSA compared to the PPO plan by zk2997

This is good calculation. But it has a missing part: the HSA contribution and the saved tax from it.

5

KookyKrista t1_iybepu8 wrote

Agree, and I acknowledged that. However, a lot of healthcare spending is/can be tax deductible. Premiums for sure, and other expenses can be paid out of an FSA if you’re on a PPO plan. Sure, there are tons of benefits to an HSA (no use it or lose it, investment options, etc.) but the short term tax benefits of an HSA aren’t all that different from an FSA if you’re just comparing annual medical costs and not using it as a vehicle for longer term savings.

Don’t get me wrong - I LOVE my HSA and max it every year. Having a big fat account built up during my younger years really cushioned the years I was pregnant and/or my kids had ER visits.

3

FantasticInvestor t1_iybh9tg wrote

Oh that’s very true. The limited purpose FSA with HSA plan is also good but just limited to dental and vision before meeting the IRS deductible

1

MinistryofTruthAgent t1_iybbie5 wrote

And… if you invest 3K every year into a HSA… at 8% growth you will get 285K tax free at 55…. Lol

2

KookyKrista t1_iybftcb wrote

…65, and it’s only tax free if you use it for health expenses (which, admittedly, shouldn’t be an issue at that age). If you withdraw for other reasons (after age 65), you pay the tax.

I agree that it’s a fantastic investment vehicle and that’s why I max mine…especially because my HDHP will always cost me less than my PPO, even in “high cost” years. But in OP’s case it’s just not that clear cut, and they mentioned they still have some runway on their regular retirement accounts.

1

MinistryofTruthAgent t1_iybil9e wrote

Everyone needs healthcare whether you like it or not even at 35. It can also be used for vision and dental.

5