HSA

General Discussion on the Permanent Portfolio Strategy

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Ugly_Bird
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Re: HSA

Post by Ugly_Bird » Mon Dec 16, 2019 7:51 pm

Tortoise wrote:
Mon Dec 16, 2019 6:35 pm
Even if you have a lot of medical expenses, my understanding is that if you have a big enough cash cushion in your taxable accounts, you can potentially come out ahead by using taxable cash to pay all of your medical bills and letting your HSA grow tax-free for as long as possible (then eventually spending it in retirement or something).

I think the idea is that if you pay current medical expenses from your HSA, you get two tax benefits (tax-deductible contribution, tax-free withdrawal), whereas if you invest the HSA funds and wait until retirement to use them to pay medical expenses, you get three tax benefits (tax-deductible contribution, tax-free growth, tax-free withdrawal).
Gotcha! Thanks!
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