How much should I contribute to an HSA / HDHP account?
It's open enrollment and I'm going to have the HDHP wish an HSA account. I'm single, healthy, and with good start out pay, 4700 a month. My annual deductible for the HDHP is 3000.00, how much should I set aside for the HSA account?
- Anonymous8 years agoFavorite Answer
Think of the HSA as a pretax slush fund. As a single person, you can fund it with pre-tax dollars up to $3100 in 2012 (it seems to go up $50 a year). If you are healthy and don't spend the money, you roll it over to the following year.
While I sincerely hope you don't get seriously sick and need to spend $3000 in one year, it could happen.
My HDHP has a premium conversion. Out of my $1200 of premiums per year (all pre-tax through my paycheck), $750 is converted into HSA money. I have intentionally been writing a check each year to bring my contribution up to the limit. Even if I decide to go back to a tradition non-HDHP, the slush fund stays available with the pre-tax money. I'm up to about $8000 now.
Be careful when you do your taxes. Any year that you put money in (even with a premium conversion) or take money out, you MUST file a 1040 with form 8889 attached. In my case I show that I have added $2350 of post-tax money and take an adjustment on the front of my tax return to flip the money to pre-tax. That's part I of the form. Part II is for the expenses incurred after I opened the HSA that I have reimbursed myself from the HSA. I typically reimburse myself once a year, say in June, for the prior year's expenses.
- loftyLv 44 years ago
there is not any one answer. First, the expenditures quoted would be on the intense Deductible plan, no longer the contribution to the HSA. So, whilst calculating value, upload your contribution to the HSA to the top classification. next, keep in mind that something you do no longer spend from the HSA continues to be yours and would desire to you reside well-being and retire with a stability interior the HSA, you need to use the stability to pay for Medicare expenditures - that's clearly extra useful than having to locate the money someplace else. As for extra useful now, it relies upon on how healthful you're. people who're rather healthful and don't use plenty interior the way of money from the HSA earnings by skill of paying the decrease expenditures and saving the HSA funds. people who've intense well-being care expenditures additionally earnings by skill of combining the HD plan and the HSA because of the fact the HD plan in many situations covers one hundred% of expenditures over the deductible (as a result, in case you get a catastrophic ailment, as quickly as you have hit the deductible, you're sparkling, whilst people who've classic plans in many situations proceed to pay a co-pay/co-coverage on all extra expenses). it is the persons interior the middle who do extra useful with a customary plan as they hit the decrease deductible until now and save funds.
You need to max it out, if you can afford it.
$3100 if you have it.