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Hsa Insurance Account Question & Answers

2015 November 6
by Sarah Fields

Thomas asks…

How much should I contribute to my HSA?

Its open enrollment and I’m doing a high-deductible w/ HSA. Generally, should one max that out or is there a certain amount that would be best to use as an election? I am single and relatively healthy.

Thanks!

Sarah Fields answers:

If you have the money and the return on the investment options is reasonable, you might as well max out. HSA money is not lost if unused. You can keep the account after you leave the job or the insurance. You have your whole life to run up enough health care bills to use the money in the HSA.

Maria asks…

What is a Health Savings Account? And should I start me a 401K?

It’s open enrollment at my workplace. I’m 27 with three children. Would either of these benefit my family and I. My children have peachcare, but I don’t have health insurance at the current moment. I’ve been searching for a health care plan at a reasonable rate. Any suggestions? Would the HSA do me any good? What about the 401 K? Please give details. Thanks!

Sarah Fields answers:

Get insurance now.
If you can’t afford the regular plan they offer, try to find the plan that has a high deductible.
It could be as high as $3,000 per person, but if something happens it will keep your from losing your house and filing bankruptcy.
Get insurance now!

Before you invest in a 401K, I want you to have at least 6 months worth of living expenses put away in a cd or savings.
Do not touch this money for any reason – only if you lose your job.

I’m not a fan of Health Savings Accounts – the tax savings is not that great if you are in a low-tax bracket.
I would much rather see you build up your emergency fund.
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Richard asks…

Is there a such thing as a tax deductible savings account?

I am trying to deduct money from my income to go to my chase savings account. My direct deposit from my job is currently going to my chase checking account.

Sarah Fields answers:

The only savings accounts that are tax deductible are HSA’s (Health Savings Accounts) and then you have to have a high deductible insurance plan to qualify for it and you could only use that account to pay medical bills. The other kind of savings account that is deductible would be a retirement account and then of course you can’t touch that money until you are at least age 59 1/2.

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