HSAs There's no requirement that HSA contributions be made into the employer's HSA. She can open an outside HSA (say, at Fidelity) for the year. The benefits of contributing to an employer's HSA via payroll deduction are:
1. Possible employer contribution
2. Reduction in payroll income subject to FICA
a) Social Security (6.2% employee-side) - someone in the 32% tax bracket would likely max out even if W2 income is reduced by HSA contribution amount
b) Medicare (1.4
5% employee-side) - this is the only obvious benefit of contributing to the employer's chosen HSA.
---
Color me skeptical about being able to disenroll from Part A. The referenced page is not authoritative and was shown to be imprecise (re: Part C premiums). To offer another non-authoritative page, here's an
AARP page. It says that one cannot generally drop part A if one is not paying a premium, even if one has an employer plan providing primary coverage.
The hedging there is in the word "generally". AARP is just repeating what
Medicare.gov says: "Generally, you can only drop Part A (Hospital Insurance) if you have to pay a premium for it."
However, CMS is unambiguous: "Individuals entitled to premium-free Part A cannot voluntarily terminate their Part A coverage. This is not permitted by law. "
https://www.cms.gov/medicare/enrollment-renewal/health-plans/original-part-a-b (last modified 9/6/2023)
For a longer narrative saying the same thing, see this Forbes piece, Can You Drop Part A?, 6/9/2023.
https://www.forbes.com/sites/dianeomdahl/2023/06/09/can-you-drop-medicare-part-a/
HSAs @Mona, actually, she can also contribute $4,8
50 for 2023 by 4/1
5/24 so long as she signs up for HSA BEFORE December 1, 2023. Fido link has details.
Annual contributions are adjusted each year, so they may be higher in 202
5, 2026,...
Tax math looks OK otherwise.
HSAs
She is single and would be able to contribute the full amount of $
5,1
50 in 2024. In a 32% tax bracket, does that mean she would be saving $1,648 in taxes?
And, assuming that she works 3 more years and for easy math, have $1
5,4
50 ($
5,1
50 x 3) available for qualifying medical expenses (deductibles, co-payments, etc.)?
3M T-Bill Observations quick look at MMF rates SWVXX 5.23 SNOXX 5.05 SNSXX 5.078
SPAXX 4.99
VMFXX 5.3
I was a bit surprised to see Fido lag
HSAs
One huge benefit of HSAs is years of buildup of funds ....
If she is only going to work 2-3 more years, I wonder if it is worth her while to sign up for the HSA now and deal with unenrolling from Medicare Part A with the Social Security Administration. However, she is in a 32% tax bracket.
Average life expectancy for a US female aged 6
5 is about 20 years (shorter than 2/3 of the other
OECD countries). That's two decades of appreciation.
Even a non-spouse heir can withdraw the HSA assets tax-free, so long as she keeps records of qualifying expenses. The heir must make the withdrawals within a year of death.
https://tax.thomsonreuters.com/blog/what-happens-to-the-funds-in-an-hsa-after-the-account-holder-dies/
HSAs This link seems to cover a lot of the questions regarding HSA and turning 6
5 hsa_and_medicare
At age 65, you can use your HSA to pay for Medicare parts A, B, D and Medicare HMO premiums tax-free and penalty-free.
You can use an HSA to pay for Medicare PPOs and Medicare PFFS plans as well as Medicare HMO plans. They are all types of Part C (Medicare Advantage) plans.
A common misconception is that all Medicare Part C plans are HMOs. This is why one often sees articles saying that a disadvantage of Medicare Advantage (MA) plans is that they limit you to doctors in a network. That's true for HMO plans but not for the other types of MA plans. The PPOs still require insurer approval for some procedures, though.
HSAs
High Yield Bond I also have HY VWEAX available in my 403b. Surprisingly, VWEHX and multisector PIMIX track each other quite well although they are very different funds. VWEHX SDs are a bit higher: 7.83, 8.74, 6.77, but its 30-day SEC yield is better at 7.84%. So, I have decided to add some to VWEHX instead of PIMIX.
https://stockcharts.com/h-perf/ui?s=PIMIX&compare=VWEAX&id=p55691218153
3M T-Bill Observations 3m T-Bill yields have been flatlined for weeks. However,
5y, 10y, 30y yields continue to rise due to the activities of bond vigilantes.
https://stockcharts.com/h-sc/ui?s=$IRX&p=D&yr=1&mn=0&dy=0&id=p75815768413Similar for 6m,
https://stockcharts.com/h-sc/ui?s=$UST6M&p=D&yr=1&mn=0&dy=0&id=p70310329310This means that m-mkt funds and ultra-ST funds have all caught up with T-Bills. So, starting this week I am discontinuing T-Bill rolls and parking money into m-mkt funds, ultra-ST funds (USFR, ICSH), or extend maturities in some other ways (e.g multisector or HY). It may be a bit early, but my T-Bills will continue to roll off into 2024, and not all would happen right away.
HSAs @yogibearbull, she is still employed (she figures at least two more years) and her employer does not require her to sign up for Medicare. She signed up for Medicare Part A when she turned 6
5 to get it out of the way and because it was free, not thinking that she may be interested in an HSA. Her employer seems to be cutting healthcare costs by increasing her contribution and changing to a Blue Cross plan with higher co-pays and deductibles.
SLADX, FAIRX, MetWest Total Return and GIM
High Yield Bond There is PIMIX cousin etf PYLD too (30-day SEC yield 5.85%, 10/27/23).
High Yield Bond BINC is a new fund on my watch list. Inception 5/19/23. MultiSector Bond fund with Rieder. Too early to tell ...but probably higher SD than PIMIX.
High Yield Bond @shipwreckedandalone ( do you know that MFO doesn't auto-fill-in usernames, and all letters in your name have to typed for MFO tag?), I have PIMIX available in my 403b. It's a giant fund and has been in the news for large inflows (see a thread nearby). But its 30-day SEC yield on
5.46% (only; 9/30/23) gave me a pause - that is its potential future LT return. I have higher paying SVs (TIAA Traditional) also available. I am looking into it - may be it is very conservatively positioned now.
SLADX, FAIRX, MetWest Total Return and GIM If you want exposure to JOE just buy it! Why pay the fee? FAIRX owns 35%.Berkowitz lost me years ago with his erratic concentrated positions
HSAs
HSAs I have a friend who turned 66 in May, her employer's health insurance plan is an HSA-eligible plan, and she is looking to contribute. However, when she turned 65, she signed up for Medicare Part A.
My understanding is that can't participate in Medicare Part A (or B) and contribute to an HSA at the same time. Is this correct? If so, would it make sense to unenroll (if possible) from Medicare Part A?
