I think getting free travelis a bigger benefit than avoiding a bit of tax drag on this small portion of my money.] I first put our healthcare expenses on a rewards credit card and then reimburse myself from the HSA. I don’t pay directly from our HSA, though. It’s a tiny portion of my portfolio and saving and tracking receipts is something I found to be cumbersome, but I do understand the benefit of doing it the other way. [Post-publication edit: I’ve cashed in and now choose to pay as we go. I’ll probably continue to save receipts until we pack up for our next adventure, and then cash in. I’ve begun to implement this strategy, and I’m not convinced the record keeping is worth the small benefit. You receive the benefit of tax-free growth of dollars that are not withdrawn when the bill arrives. The latter approach, saving receipts, has the potential to work out in your favor. A second option is to save receipts, allow your HSA account to grow tax-free for years, then take a large reimbursement for the sum of the receipts after collecting them for years or decades. One tactic is to use the account to pay for healthcare expenses when they are incurred. There a couple ways to use your HSA dollars to cover healthcare expenses. ![]() In the year that you contribute, you could say these dollars are better than Roth dollars, but after you’ve received that deduction, the dollars remaining are at best equal to Roth, and at worst equal to tax-deferred dollars. When used for healthcare costs, the dollars in an HSA act just like Roth dollars.Įven better, you received a tax deduction when you put those dollars in the account. They’re like Sunday it’s still the weekend, but not as enticing as Saturday. HSA Dollarsĭollars in a Health Savings Account (HSA) are the next best thing. Use our link to Join and receive a bonus of up to $50. Start receiving paid survey opportunities in your area of expertise to your email inbox by joining the All Global Circle community of Physicians and Healthcare Professionals. I made one small Roth conversion as a resident, a Mega Roth conversion as an attending, and have made backdoor Roth contributions for several years. If nothing else, contribute to a backdoor Roth for yourself and your spouse, if you’ve got one. While it may not be ideal to make large Roth investments when you are in a high-income tax bracket, particularly if you anticipate a lower tax bracket in retirement, Roth dollars are sure great to have. ![]() The Roth dollars also benefit from being sheltered from required minimum distributions (RMDs). ![]() You’ve already paid tax on them, and they will continue to grow tax free until you use them. If they were a day of the week, they’d be Saturday. ![]() Roth dollars are the most valuable dollars you can have. Let’s take a look at each of those dollars, from the most to least valuable. Some of those dollars are inherently worth more than others, depending on the current and future tax treatment. If you’ve been earning and investing for awhile, you most likely have money in a variety of account types. While I have seen a few very detail-oriented people adjust their net worth based on where their money is held, most of us - myself included - just add up the value of all the accounts to arrive at the total. Today’s post is focused on the value of the American dollar in various retirement accounts. Although, friends, it is true that my money is worth more than yours. This article has nothing to do with exchange rates. Nor am I referring to the measly seventy cents or so that the New Zealand and Australian dollars are now worth (in 2018). No, Loonie Doc, I’m not talking about your loonie Canadian dollar.
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