I agree that simplification has its merits. Another option you might consider is selling your appreciated assets in the HSA as you stated, but leave those sales in a treasury fund (if it's available to you). That way, you can keep the HSA but will pay no or nearly no state tax over time. If your HSA is at Fidelity, you can even buy treasury bills which would grow your balance a bit without any significant taxation. Then again, if the balance is really low and you don't have access to treasury funds, it might not be worth the effort.I will have a couple of years after I start receiving Social Security benefits (and thus no longer will be converting IRA to Roth) but before I start RMDs when my CA taxable income will be close to zero. I am considering withdrawing all the funds from my HSA during those years to avoid or minimize the CA income tax on the realized gains. This will not only avoid the tax, but will also close my HSA, which is only a small portion of my overall portfolio. I'm generally trying to consolidate as many accounts as possible.
Statistics: Posted by Artsdoctor — Wed Mar 13, 2024 9:20 pm — Replies 46 — Views 4368