Retirement Funds

[JunkYardUnz]

You can put in pre-tax money, and any investment gains aren't taxed, and when you withdraw money (to pay for medical expenses) you aren't taxed either.

It’s a triple dip it has the benefits of both the Roth and Traditional and you can cash out tax free if you have medical expenses before you retire.

I had a friend who would fund his HSA to the max and pay his medical expenses out of pocket due to the above.

[ushdadude]

It’s a triple dip it has the benefits of both the Roth and Traditional and you can cash out tax free if you have medical expenses before you retire.

I had a friend who would fund his HSA to the max and pay his medical expenses out of pocket due to the above.

That's what I do. This is not like an FSA where if you don't use it you lose it.
There isn't even a rule that the medical expense has to be the year that you withdraw. So you can keep a tally of all your medical expenses for years and withdraw from the HSA tax-free whenever you need it. Just keep receipts.

[sguitarist18]

Also, money contributed to an HSA is tax deductible even if you don't itemize.

[Fish Tank]

It’s a triple dip it has the benefits of both the Roth and Traditional and you can cash out tax free if you have medical expenses before you retire.

It also has the downside of both - you can only withdraw for very specific expenses.

I had a friend who would fund his HSA to the max and pay his medical expenses out of pocket due to the above.

"Out of pocket" as opposed to what?

[ExGingi]

Also, money contributed to an HSA is tax deductible even if you don't itemize.

Better yet, it can be done as an employer contribution, or as part of a section 125 cafeteria plan, not subjecting it to FICA.

[Fish Tank]

Better yet, it can be done as an employer contribution, or as part of a section 125 cafeteria plan, not subjecting it to FICA.

So if I have it deducted from paycheck I'm better off than if I contribute on my own ?

[farmbochur]

So if I have it deducted from paycheck I'm better off than if I contribute on my own ?

If HSA is funded with payroll deduction:

Pro: it isn't subject to FICA taxes

Con: depending on your circumstances, it may lower your social security benefit at retirement.

IMO, the pro outweighs the con.

I disagree with those arguing against viewing HSA's as retirement funds, particularly for individuals looking to contribute to traditional accounts (rather than Roth). As mentioned above, HSA delivers triple tax advantage for contributions, gains, and distributions used for medical expenses. In the event that no medical expenses are incurred, only distributions are taxed. The investor is no worse off than having contributed to a traditional IRA/401k. There may be considerations regarding creditor protections that I'm not accounting for.

[ExGingi]

So if I have it deducted from paycheck I'm better off than if I contribute on my own ?

If the deduction is done as part of a section 125 Cafeteria plan, the answer is yes, saves FICA.

[ushdadude]

It also has the downside of both - you can only withdraw for very specific expenses.
"Out of pocket" as opposed to what?

The medical expenses don't have to be from the year you want to withdraw. And the definition of medical expenses is very loose.


Oop as opposed to withdrawing from HSA. And saving HSA funds for later

[Fish Tank]

The medical expenses don't have to be from the year you want to withdraw. And the definition of medical expenses is very loose.

True. Good Point.
Many healthcare related items qualify. I use https://fsastore.com/ as a source to see what qualifies.

[Yehuda57]

Amazon has a page that displays qualifying products

[skyguy918]

Let's also keep in mind that not everyone is eligible to contribute to an HSA, CMIIW.

[ushdadude]

Let's also keep in mind that not everyone is eligible to contribute to an HSA, CMIIW.

correct

[ExGingi]

Let's also keep in mind that not everyone is eligible to contribute to an HSA, CMIIW.

Exactly.

One cannot contribute to an HSA while on Medicaid, Essential Plan, etc. Need to have an HSA compatible HDHP.

[Galitzyaner]

A. In the current market, where retirement funds are on a constant losing streak, losing an average of 20% value every month, is it still worth keeping these payroll deductions in place (even with a minor employer match)?

B. For someone who doesn't dabble with their funds, stays very conservative and right now is fully invested in a target date fund (FidAdv), and they (the funds) are doing pretty bad...  Was wondering if it's worth them changing their future contributions from TDFs to other funds that seem to me (PCCIIW) are preforming better, even during the current time.

Here are the best ones (offered by this firm) that caught my eye:

In balanced funds
American Funds American Balanced R6 - RLBGX.

In large-cap stocks
Vanguard equity-income Inv - VEIPX.
Vanguard Value Index Adm - VVIAX.
Columbia Dividend Income Inst2 - CDDRX.

In small-cap stocks
DFA US Targeted Value I - DFFVX.

Any thoughts from those who do dabble?

TIA!

[farmbochur]

A. In the current market, where retirement funds are on a constant losing streak, losing an average of 20% value every month, is it still worth keeping these payroll deductions in place (even with a minor employer match)?

B. For someone who doesn't dabble with their funds, stays very conservative and right now is fully invested in a target date fund (FidAdv), and they (the funds) are doing pretty bad...  Was wondering if it's worth them changing their future contributions from TDFs to other funds that seem to me (PCCIIW) are preforming better, even during the current time.

Here are the best ones (offered by this firm) that caught my eye:

In balanced funds
American Funds American Balanced R6 - RLBGX.

In large-cap stocks
Vanguard equity-income Inv - VEIPX.
Vanguard Value Index Adm - VVIAX.
Columbia Dividend Income Inst2 - CDDRX.

In small-cap stocks
DFA US Targeted Value I - DFFVX.

Any thoughts from those who do dabble?

TIA!

3 words: stay the course.

To win in the stock market, you need to have the temperament to sustain market swings without overreacting. I'm not sure exactly what your portfolio consists of, but the market is not losing 20% a month. It's down ~20% YTD. Incidentally, it gained ~20% in each of the last 2 years.

The time to level down your risk is when markets are high, not low. Your proposal would simply lock in your losses.

One of Warren Buffett's many great lines: "Be greedy when others are fearful and fearful when others are greedy."

[aygart]

A. In the current market, where retirement funds are on a constant losing streak, losing an average of 20% value every month, is it still worth keeping these payroll deductions in place (even with a minor employer match)?

B. For someone who doesn't dabble with their funds, stays very conservative and right now is fully invested in a target date fund (FidAdv), and they (the funds) are doing pretty bad...  Was wondering if it's worth them changing their future contributions from TDFs to other funds that seem to me (PCCIIW) are preforming better, even during the current time.

Here are the best ones (offered by this firm) that caught my eye:

In balanced funds
American Funds American Balanced R6 - RLBGX.

In large-cap stocks
Vanguard equity-income Inv - VEIPX.
Vanguard Value Index Adm - VVIAX.
Columbia Dividend Income Inst2 - CDDRX.

In small-cap stocks
DFA US Targeted Value I - DFFVX.

Any thoughts from those who do dabble?

TIA!

Regarding the first question, if anything you should put in more now.

[ushdadude]

A. In the current market, where retirement funds are on a constant losing streak, losing an average of 20% value every month, is it still worth keeping these payroll deductions in place (even with a minor employer match)?

B. For someone who doesn't dabble with their funds, stays very conservative and right now is fully invested in a target date fund (FidAdv), and they (the funds) are doing pretty bad...  Was wondering if it's worth them changing their future contributions from TDFs to other funds that seem to me (PCCIIW) are preforming better, even during the current time.

Here are the best ones (offered by this firm) that caught my eye:

In balanced funds
American Funds American Balanced R6 - RLBGX.

In large-cap stocks
Vanguard equity-income Inv - VEIPX.
Vanguard Value Index Adm - VVIAX.
Columbia Dividend Income Inst2 - CDDRX.

In small-cap stocks
DFA US Targeted Value I - DFFVX.

Any thoughts from those who do dabble?

TIA!

https://www.whitecoatinvestor.com/6-things-to-do-in-a-bear-market

[dm123]

A. In the current market, where retirement funds are on a constant losing streak, losing an average of 20% value every month, is it still worth keeping these payroll deductions in place (even with a minor employer match)?

B. For someone who doesn't dabble with their funds, stays very conservative and right now is fully invested in a target date fund (FidAdv), and they (the funds) are doing pretty bad...  Was wondering if it's worth them changing their future contributions from TDFs to other funds that seem to me (PCCIIW) are preforming better, even during the current time.

Here are the best ones (offered by this firm) that caught my eye:

In balanced funds
American Funds American Balanced R6 - RLBGX.

In large-cap stocks
Vanguard equity-income Inv - VEIPX.
Vanguard Value Index Adm - VVIAX.
Columbia Dividend Income Inst2 - CDDRX.

In small-cap stocks
DFA US Targeted Value I - DFFVX.

Any thoughts from those who do dabble?

TIA!

What do you mean by "minor employer match"? This is usually free money why wouldn't you take it?

[Galitzyaner]

3 words: stay the course.

To win in the stock market, you need to have the temperament to sustain market swings without overreacting. I'm not sure exactly what your portfolio consists of, but the market is not losing 20% a month. It's down ~20% YTD. Incidentally, it gained ~20% in each of the last 2 years.

The time to level down your risk is when markets are high, not low. Your proposal would simply lock in your losses.

One of Warren Buffett's many great lines: "Be greedy when others are fearful and fearful when others are greedy."

Thank you. Yes, you're correct; it's 20% YTD, I misread.

Regarding the first question, if anything you should put in more now.

TY

https://www.whitecoatinvestor.com/6-things-to-do-in-a-bear-market

TY

What do you mean by "minor employer match"? This is usually free money why wouldn't you take it?

To understand the background to my question. It is "free money" if you match, so your still reducing you're "take home pay" and depositing it into an account that's constantly losing.