I’ve always been a fan of the Health Savings Account. Pre tax? Check. Pre-FICA? Even better!
As soon as my employer started offering these, I put away the maximum contribution allowed. I did the math, saw a $10,000 out of pocket maximum, then said as long as we don’t have a ton of medical expenses in the first two years, this risk will pay off! At the time, I worked in a state with an income tax and Mrs. Shirts was also working. This meant we was earning below the social security contribution limit, but in a 25% marginal tax rate as a dual income home. On top of federal income tax, we were also paying 6% to the state of Georgia and 6.2% for Social Security. The HSA immediately allowed us to reduce our tax liability while putting away money tax free.
We were fortunate over the next eight years, putting away the maximum each year while not incurring much in healthcare expenses. We also enjoyed one of the best stock market runs in history between 2009 and 2016. Our account quickly grew and before we knew it, we had amassed over $60,000 in the HSA account. Then we ran across the Mad Fientist’s article referring to the HSA as the Ultimate Retirement Account. Continue reading “Why I Stopped Saving HSA Receipts”