This Was the Last Time I Took a Work Call at the Coffee Shop

TLDR: Coffee shops and HSA's don't always go well together.

I'm normally really diligent about taking work calls at the office for privacy reasons. But, I really wanted an espresso and the topic for my call wasn't too serious. We were discussing HSA's for their 20 person mental therapy office. So here I am just sipping my espresso, going down my list of "Kate has HSA. Tom doesn't. James definitely does..." and I notice this group of 20-something girls really eyeing me down.

Some time goes by. I wrap up with the client and after saying "HSA" maybe 60 times on the call, one of the more confident ladies at the table near me kindly asks what I do for work to be so concerned with HSA's.

The royal confusion on my face must have been loud.

She goes on to say HSA stands for "has sex appeal" and was under the impression I knew this.


Somewhat tickled, I explained that in my world (the magical land of debits and credits) it stands for "health savings account" and that accounting can be 'sexy' at times. I expected a sympathy laugh. I received none.

Because I tried to use an accounting joke with a non-accountant in her 20's that thought HSA stood for has sex appeal. Face + palm.

Anyways, let's talk about HSA's...

It isn’t easy to make predictions, especially about the future. But there is one prediction we’re confident in making: you will have substantial out-of-pocket expenses for health care after you retire. Personal finance experts estimate that an average retired couple age 65 will need at least $300,000 to cover health care expenses in retirement.

You may need more.

The time to save for these expenses is before you reach age 65. And the best way to do it may be to open a Health Savings Account (HSA). After several years, you could have a fat HSA balance that will help pave your way to a comfortable retirement.

Not everyone can have an HSA. But you can if you’re self-employed or your employer doesn’t provide health benefits. Some employers offer, as an employee fringe benefit, either HSAs alone or HSAs combined with high-deductible health plans.

An HSA is much like an IRA for health care. It must be paired with a high-deductible health plan with a minimum annual deductible of $1,400 for self-only coverage ($2,800 for family coverage). The maximum annual deductible must be no more than $7,050 for self-only coverage ($14,100 for family coverage).

An HSA can provide you with three tax benefits:

1. You or your employer can deduct the contributions, up to the annual limits.

2. The money in the account grows tax-free (and you can invest it in many ways).

3. Distributions are tax-free if used for medical expenses.

No other tax-advantaged account gives you all three of these benefits.

You also have complete flexibility in how to use the account. You may take distributions from your HSA at any time. But unlike with a traditional IRA or 401(k), you do not have to take to take annual required minimum distributions from the account after you turn age 72.

Indeed, you need never take any distributions at all from your HSA. If you name your spouse the designated beneficiary of your HSA, the tax code treats it as your spouse’s HSA when you die (no taxes are due).

If you maximize your contributions and take few distributions over many years, the HSA will grow to a tidy sum.

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