Author Topic: New To Investing Thread  (Read 327205 times)

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Re: New To Investing Thread
« Reply #2150 on: April 17, 2019, 08:59:25 PM »
But yes, my plan also relies on non-restatement investments.

I think you mean non-statutory. Oh man . . .

Whoops fraudian slip. Wait, I mean, crap.

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New To Investing Thread
« Reply #2151 on: April 17, 2019, 09:04:07 PM »
Talk dirty to me some more
What if I told you I have never spent any of my HSA funds and pay all medical expenses out of pocket?

:love:

I’ve heard of this but don’t get it. First it’s always a bit risky exploiting a loophole that congress could close anytime over the next 20 years that would mess up the strategy. But also, like the only expense guaranteed to go up when you get older is healthcare. So those funds are definitely getting spent either way.

Offline ben ji

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Re: New To Investing Thread
« Reply #2152 on: April 17, 2019, 09:39:39 PM »
Talk dirty to me some more
What if I told you I have never spent any of my HSA funds and pay all medical expenses out of pocket?

:love:

I’ve heard of this but don’t get it. First it’s always a bit risky exploiting a loophole that congress could close anytime over the next 20 years that would mess up the strategy. But also, like the only expense guaranteed to go up when you get older is healthcare. So those funds are definitely getting spent either way.

Funds you contribute to an HSA (through an employer plan) are not subject to income tax AND not subject to SS/Medicare, this is basically an extra 7%. Funds you contribute to a traditional IRA/401k have SS/Medicare taxes applied. Essentially funds you contribute to your HSA are never taxed by the government in any way until you are old. When you reach a certain age (not going to google it now but its in your 60's) you are eligible for medicare and any funds you still have in your HSA are treated like a traditional IRA.

Scenario - Lets say you are a good looking great smelling KSU grad fresh out of college who is in excellent health and ready to take on the world. You expect to have low medical expenses (basic checkups/minute clinic stuff) for the next 10 years and an extra $3,400 to invest. You could just put that $3400 in a traditional IRA....OR....you could sign up for the HDHP health plan and contribute $3400 a year and invest it which is actually worth around $3655 (no SS/Medicare taken out).

After 10 years (Assuming 7% real growth) your IRA balance would be worth $48,477, your HSA balance would be worth $52,190. Run that simulation out to 20 years and its $143,687 vs $154,857, keeps getting larger after that.

You can also pay medical expenses with funds from your checking/savings account and then reimburse yourself Xfinity years down the road after the money has grown tax free for Xfinity years. Spending 2k on lasik this year? Pay with regular funds and save the receipt and then 20 years from now you can withdraw that 2k from your HSA tax/ss/medicare free, in that 20 years that 2k grew to 7.7k so you netted 5.7k in todays dollars by doing this.

This article explains it pretty well https://www.madfientist.com/ultimate-retirement-account/
« Last Edit: April 17, 2019, 09:51:20 PM by ben ji »

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New To Investing Thread
« Reply #2153 on: April 17, 2019, 09:47:25 PM »
So at 60-whatever you can withdraw HSA funds either tax free to reimburse previously incurred medical expenses or tax deferred (on the growth) for any other purpose?

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New To Investing Thread
« Reply #2154 on: April 17, 2019, 09:54:46 PM »
Not a direct response but can’t you withdraw HSA funds at any time and pay a penalty(for non medical expenses)?
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Re: New To Investing Thread
« Reply #2155 on: April 17, 2019, 09:56:34 PM »
Here's the thing about retirement savings. By the time you retire, you've pretty much already had all of the fun that you want to have in life. At that point, you're kinda just sittin' around and waiting to die, which doesn't require that much money. So, if you're saving too much for retirement, it's like you're robbing your younger self of fun that your older self has no interest in having.

it's a balancing act, for sure.
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Re: New To Investing Thread
« Reply #2156 on: April 17, 2019, 09:57:11 PM »
So at 60-whatever you can withdraw HSA funds either tax free to reimburse previously incurred medical expenses or tax deferred (on the growth) for any other purpose?

You can spend your HSA money on medical expenses, it comes with a debit card....BUT if you spend after tax money (Savings/checking) on health services you can reimburse yourself from the HSA right away or 30 years from now. In that 30 years your money is invested and growing.

Read the article i posted earlier.

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New To Investing Thread
« Reply #2157 on: April 17, 2019, 10:06:41 PM »
No I get that’s how it works currently. But it’s clearly a loophole that seems like it could get closed any time before you reimburse yourself.

Reading the article it looks like it is treated as tax deferred on growth after 65 for any non-health expenses, so still not a terrible deal.
« Last Edit: April 17, 2019, 10:13:12 PM by catastrophe »

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Re: New To Investing Thread
« Reply #2158 on: April 17, 2019, 10:17:31 PM »
No I get that’s how it works currently. But it’s clearly a loophole that seems like it could get closed any time before you reimburse yourself.

Reading the article it looks like it is treated as tax deferred on growth after 65, so still not a terrible deal.

Even if they close the loophole that lets you withdraw the funds Xfinity years later you are still able to invest money before it is subject to taxes/SS/Medicare. The funds can also grow tax free while you are young/healthy and can be used later when you are old and have more medical expenses.

HSA's are the perfect investment platform for young healthy people and are not going away. If anything the amount you can contribute to them will increase to help people save for large medical expenses later in life.

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Re: New To Investing Thread
« Reply #2159 on: April 18, 2019, 12:36:08 AM »
I’m def coming around to the idea, especially since my work offers a FSA on top.

Offline Brock Landers

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Re: New To Investing Thread
« Reply #2160 on: April 18, 2019, 10:48:13 AM »
Annual raise took effect with this pay period.  Instead of bumping up my 401k contributions I finally got off my ass and started a Roth IRA, feels pretty good.  Maybe someday I'll start one of those fancy HSA accounts that I see mentioned on here.

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Re: New To Investing Thread
« Reply #2161 on: April 18, 2019, 10:59:00 AM »
nice move. everyone should take a roth to pound town while they still can. like, if I could go back and tell just graduated steve dave one financial thing it'd be max out a roth first.

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Re: New To Investing Thread
« Reply #2162 on: April 18, 2019, 10:59:35 AM »
and if your employer allows a roth 401k that's the play early in your career v. pre-tax contributions.

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New To Investing Thread
« Reply #2163 on: April 18, 2019, 10:59:39 AM »
High deductible HSA is the only health plan my work even offers. I guess HRA is an option too but I have no idea why.

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Re: New To Investing Thread
« Reply #2164 on: April 18, 2019, 09:19:55 PM »

Fresh out of college ben ji and his bro's used to get hammered at the bars in westport then take a cab to Harrahs casino and resort to do a little late night gambling on the riverboats. One night ole ben ji won about $700 playing blackjack (more than he had ever won in his life) and decided that instead of putting it back into his checking account to he would start one of those Roth IRA's had been reading about and begin contributing a couple hundred a month.

8 years later I want to go back and pat myself on the back and say "You've done good ben ji, you've done real good"






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Re: New To Investing Thread
« Reply #2165 on: May 04, 2019, 08:32:07 AM »
Around five years ago, I picked five different types of mutual funds for one of my retirement accounts. It's impossible not to notice that one of them is really, REALLY lagging behind the other four. It's meant to be a long term investment, of course, but should I go ahead and dump it anyway because it seems like such a loser "lately?"

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Re: New To Investing Thread
« Reply #2166 on: May 04, 2019, 08:54:28 AM »
Performance for each of the five mutual funds looks about the same for 10+ years, so maybe I just answered my own question.

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Re: New To Investing Thread
« Reply #2167 on: May 04, 2019, 09:53:28 AM »
yeah, a large number of people I know "diversify" their accounts by buying 10 different funds that essentially all track the same thing.

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Re: New To Investing Thread
« Reply #2168 on: May 04, 2019, 09:58:03 AM »
If that “thing” is the overall market that’s what I do!

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Re: New To Investing Thread
« Reply #2169 on: May 04, 2019, 10:00:23 AM »
If that “thing” is the overall market that’s what I do!

yeah, you could do that with one fund. or 500. whatevs. good news is that unless you are paying transaction fees there's really no downside.

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Re: New To Investing Thread
« Reply #2170 on: May 04, 2019, 10:05:46 AM »
I could suggest adding a certain digital asset to your portfolio, but not everyone wants triple to quadruple digit growth.
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Re: New To Investing Thread
« Reply #2171 on: May 04, 2019, 10:07:19 AM »
who here wants to quadruple digit growth?

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Re: New To Investing Thread
« Reply #2172 on: May 04, 2019, 10:27:00 AM »
It’s not for me

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Re: New To Investing Thread
« Reply #2173 on: May 04, 2019, 08:12:09 PM »
Eight thumbs up, I say . . .

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Re: New To Investing Thread
« Reply #2174 on: May 05, 2019, 06:03:53 AM »
Around five years ago, I picked five different types of mutual funds for one of my retirement accounts. It's impossible not to notice that one of them is really, REALLY lagging behind the other four. It's meant to be a long term investment, of course, but should I go ahead and dump it anyway because it seems like such a loser "lately?"

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