Personal Finance (Not Investing) • Proposed update to Health Savings Account wiki page

...It's rare in the general population, but the math says that someone following Bogleheads principles can do it without much trouble.

And whether the Boglehead wiki should be targeted toward "elite Bogleheads" or a wider population continues as a root cause of disagreements.

...an overfunded HSA is (1) mathematically possible and (2) not rare enough that the wiki needs to mention it, but it should not interrupt the flow of the page, which is why the content was put into its own section.

Great, we agree!

The sentences you added were good, and I moved them down to a "Cautions" section that I think adequately addressed the concerns. I did clean up the link you provided, though. In my view, the biggest factor is age; it's probably unwise to predict an overfunded HSA at age 35, but at 65 you can have a much better idea. Someone in this thread reported a large HSA due to very high investment returns.

Agree with the "don't overreact early in life" perspective. Because this particular caution applies only to a possibly overfunded HSA, I'll put the original sentences back there.

Of course, if one truly believes an overfunded HSA is likely, and a deductible traditional contribution would end up worse than a taxable contribution, it would be better to avoid the HSA contribution in the first place.

Second, on the non-deductible IRA comparison, you are still making the mistake of thinking about it in terms of the choice to contribute.

We differ in the definition of mistake. As noted above, better to look at the whole picture upfront, and follow the references throughout the internet that say in so many words, "after age 65, non-medical withdrawals from an HSA are treated the same as those from a traditional IRA."

We can, however, keep the analysis of what to do with any overfunded amount. That applies even without any reference to a non-deductible tIRA. Do you agree?

Maybe we should start here: would you agree that the choice to make a qualified withdrawal of X dollars from an overfunded HSA is equivalent to the choice of leaving X dollars in the HSA, versus investing X dollars in a taxable account?

Yes. I'll go further: we could delete "from an overfunded HSA" and the answer would be the same.

Statistics: Posted by FiveK — Mon Jul 22, 2024 1:01 pm — Replies 42 — Views 4633

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