Work

[shu09]

Didn't want to derail the seeding thread, but wanted to expand on this. I generally agree with @SHUSA take on working. It's necessary, but there is far more to life than it. Wanted to get the opinions of others on it.

For instance, my goal is to retire as early as possible. I have to work to make that money, but I don't want to be working when I'm 55/60+ years old. Even earlier if possible. I work to earn money to have the life that makes me comfortable, I don't work for the sake of working. One of the questions I despise when I meet someone new is, "so, what do you do?" Inside I always feel like saying it's none of your business (LOL) and work does not define me. I simply work to earn money but I'm defined by what I do outside of the office.

 

[SHUSA]

its a tricky situation. work like a dog to retire early, but what if you drop dead at 55? dont work and live terribly.

really like your comment about not letting work define you. sometimes it can define someone and thats fine. there are a few people out there who do work theyre truly passionate about. but thats the minority.

im extremely financially illiterate, learning each day. my goal when i have kids is to make them extremely financially savvy. that way they can better equipped for work/life balance.

i have a friend whose winning the system. hes a data analyst with permanent WFH. he stopped renting an apt, put his stuff in storage, and has travelled to 20 countries and 50+ national parks (only has 3 left). instead of rent he pays for hotels/airbnbs. the pictures this guy takes are unvelievable. gets his work done too. doubt he will have an eaely retirement but thats a life hes actually LIVING.

 

[shu09]

It's a joke that the US school system does not teach basic financial literacy. The average American thinks investing is only for "rich" people. These are the same people who live beyond their means and are thousands of dollars in credit card debt. On one hand I feel bad for them, on the other I don't.

I don't think kids are in the cards for me, but I would 100% agree on teaching them financial literacy.

I know someone who did something similar to your friend, at least for a year. Those people are doing it right.

 

[ed odowd]

A course in basic economics and how the banking system works would be great if offered in high schools.I benefitted from such a course in high school and found eco 101 in college a breeze because of it.But for kids not going to college this course would be of great value.

 

[SHallguy2]

I taught Personal management to HS scouts, one of the most rewarding things I ever did in my life. 12 week program, by the time it was over their parents said their boys were questioning the family financial planning. LOL One of the classes was about leasing VS. buying a car. I was shocked at how little these kids knew about anything. Banks, interest rates, different types of loans. My son told me the other day that all the important things in life he learned driving with me in the car. No radio, no phones, no computers, solid hour and 20 minutes back and forth to the shore. Parents are absent from the present here and now. You can teach a kid to do basic math in his head at a lightning speed inside several hours of driving in a car. I had a rule for college, I pay for A's & B's, you pay for D's & F's while C's were on a sliding scale. Every parent should use this rule, make the kid sign a contract.
I'm one of those people who loves what I do for a living, I will probably work in some capacity my whole life. My own business so I can choose how much, and who I'm going to do business with. When it stops being fun I will leave.

 

[HALL85]

It's a joke that the US school system does not teach basic financial literacy. The average American thinks investing is only for "rich" people. These are the same people who live beyond their means and are thousands of dollars in credit card debt. On one hand I feel bad for them, on the other I don't.

I don't think kids are in the cards for me, but I would 100% agree on teaching them financial literacy.

I know someone who did something similar to your friend, at least for a year. Those people are doing it right.

Being on the other side of this discussion in terms of age, the only advice I could give would be as follows:
- If you’re at the early stage of your career, I would suggest you evaluate the work you want to do in terms of passion and purpose it can provide. In addition, really think through the lifestyle that is important to you. Find a career/path that can give you as close to that target as possible. If work is only a paycheck, to live your life now and/or later, I couldn’t imagine being that unhappy for 30, 40 or 50 years just for the money.
- it’s difficult to know how much you’re going to need in retirement, especially early on. It depends on what you want to have and do in retirement. I know people that are quite content with $500k or $1M once they retire. And others that fret about having $10M in the bank.
- Taking a classes to learn are important, but I would recommend finding three or four trusted advisors that you can have these kinds of conversations during your life. Try talking to the controller or CFO at your company. You would be surprised how someone in the more senior position is willing to help and provide advice. My CFO and I offer this kind of advice to some of the younger people in the office if they are interested. It’s really enjoyable, especially for someone that is inquisitive and wants to learn. Having multiple sources is key so you can triangulate all of the information that you get. A class, while helpful, may be good for that point in time but as you get older the information gets either dated or you forget.
- Everybody has an investment/risk tolerance. Obviously you want to save as much as possible earlier in your career if you can while still enjoying the fruits of your labor. But you have to come up with a plan even if it’s pretty basic. And you have to enjoy the journey. Sacrificing everything until that magical retirement date while Noble, can create a lot of regret.

One of my kids friends, has an e-commerce job that he can perform remote. He and his girlfriend travel the world during the course of the year and spend less than 30 days in the United States to avoid Federal income taxes. His mailing address is his mothers home in Brooklyn. He comes back for a week three or four times a year. That’s the lifestyle they want and they can afford it and save as well. Brilliant for them. I couldn’t imagine doing that, because that’s not in my DNA. I have seen dozens of other examples that are similar. So many more options today that being a slave to your job because you feel you have no choices is more of an excuse.

 

[SHUSA]

I taught Personal management to HS scouts, one of the most rewarding things I ever did in my life. 12 week program, by the time it was over their parents said their boys were questioning the family financial planning. LOL One of the classes was about leasing VS. buying a car. I was shocked at how little these kids knew about anything. Banks, interest rates, different types of loans. My son told me the other day that all the important things in life he learned driving with me in the car. No radio, no phones, no computers, solid hour and 20 minutes back and forth to the shore. Parents are absent from the present here and now. You can teach a kid to do basic math in his head at a lightning speed inside several hours of driving in a car. I had a rule for college, I pay for A's & B's, you pay for D's & F's while C's were on a sliding scale. Every parent should use this rule, make the kid sign a contract.
I'm one of those people who loves what I do for a living, I will probably work in some capacity my whole life. My own business so I can choose how much, and who I'm going to do business with. When it stops being fun I will leave.

why were you shocked. they dont teach it at any point during schooling. on top of that everything is complicated on purpose. powers at be dont want everyday people being financially savvy.

 

[SHUSA]

Being on the other side of this discussion in terms of age, the only advice I could give would be as follows:
- If you’re at the early stage of your career, I would suggest you evaluate the work you want to do in terms of passion and purpose it can provide. In addition, really think through the lifestyle that is important to you. Find a career/path that can give you as close to that target as possible. If work is only a paycheck, to live your life now and/or later, I couldn’t imagine being that unhappy for 30, 40 or 50 years just for the money.
- it’s difficult to know how much you’re going to need in retirement, especially early on. It depends on what you want to have and do in retirement. I know people that are quite content with $500k or $1M once they retire. And others that fret about having $10M in the bank.
- Taking a classes to learn are important, but I would recommend finding three or four trusted advisors that you can have these kinds of conversations during your life. Try talking to the controller or CFO at your company. You would be surprised how someone in the more senior position is willing to help and provide advice. My CFO and I offer this kind of advice to some of the younger people in the office if they are interested. It’s really enjoyable, especially for someone that is inquisitive and wants to learn. Having multiple sources is key so you can triangulate all of the information that you get. A class, while helpful, may be good for that point in time but as you get older the information gets either dated or you forget.
- Everybody has an investment/risk tolerance. Obviously you want to save as much as possible earlier in your career if you can while still enjoying the fruits of your labor. But you have to come up with a plan even if it’s pretty basic. And you have to enjoy the journey. Sacrificing everything until that magical retirement date while Noble, can create a lot of regret.

One of my kids friends, has an e-commerce job that he can perform remote. He and his girlfriend travel the world during the course of the year and spend less than 30 days in the United States to avoid Federal income taxes. His mailing address is his mothers home in Brooklyn. He comes back for a week three or four times a year. That’s the lifestyle they want and they can afford it and save as well. Brilliant for them. I couldn’t imagine doing that, because that’s not in my DNA. I have seen dozens of other examples that are similar. So many more options today that being a slave to your job because you feel you have no choices is more of an excuse.

generally i agree with your comments, but i wouldnt say its an excuse. your perspective might be a bit anecdotal. for example the generation that got out of college during the years after the 2008 recession basically took any job that came their way. thats the field they are stuck in. thats where their experience is. its much tougher to change industries than you would think. and everyones personal situation is different. also not sure how many people can just knock on the CFO door for a personalized sit down. that seems unrealistic. ive never been able to do that. its also not so simple for people to find one trusted advisor let alone a few.

lastly the hardest part is actually figuring out what you really want. in a career, out of life, out of a savingns plan, etc. its easy to say "do what works for you", but reality is that most people dont know what works for them. what they want. their purpose. nobody is helping with that either. most people think in boxed in parameters of todays society. hard not to. how many existential conversations are people having? people dont know what all of the possibilities are. most people cant imagine it. i also have a friend that tours the world. there are probably thousands that could do it if they werent conditioned to live life the way its always been presented to them.

 

[HALL85]

generally i agree with your comments, but i wouldnt say its an excuse. your perspective might be a bit anecdotal. for example the generation that got out of college during the years after the 2008 recession basically took any job that came their way. thats the field they are stuck in. thats where their experience is. its much tougher to change industries than you would think. and everyones personal situation is different. also not sure how many people can just knock on the CFO door for a personalized sit down. that seems unrealistic. ive never been able to do that. its also not so simple for people to find one trusted advisor let alone a few.

lastly the hardest part is actually figuring out what you really want. in a career, out of life, out of a savingns plan, etc. its easy to say "do what works for you", but reality is that most people dont know what works for them. what they want. their purpose. nobody is helping with that either. most people think in boxed in parameters of todays society. hard not to. how many existential conversations are people having? people dont know what all of the possibilities are. most people cant imagine it. i also have a friend that tours the world. there are probably thousands that could do it if they werent conditioned to live life the way its always been presented to them.

Do you go through life just making excuses? OMG…life is hard sometimes but with your doomed approach, good luck. Every generation has challenges…do you think immigrants at the turn of the 20th century had it easier? It’s far easier to reinvent yourself today with all the options, information, technology available. The only thing limiting you from having meaningful conversations, is you. And reading your posting history just underscores that. I read this particular post, and it screams “lazy and victim”. You don’t want to even try so you blame others…I feel bad for your parents, or maybe the should bear some of the responsibility.

 

[shu09]

generally i agree with your comments, but i wouldnt say its an excuse. your perspective might be a bit anecdotal. for example the generation that got out of college during the years after the 2008 recession basically took any job that came their way. thats the field they are stuck in. thats where their experience is. its much tougher to change industries than you would think. and everyones personal situation is different.

This is a good point and quite true. The generation that has graduated since, let's say 2015, has it so much easier in terms of opportunities and preparation/prospects/advice than those who are only a few years older than them.

lastly the hardest part is actually figuring out what you really want. in a career, out of life, out of a savingns plan, etc. its easy to say "do what works for you", but reality is that most people dont know what works for them. what they want. their purpose. nobody is helping with that either. most people think in boxed in parameters of todays society. hard not to. how many existential conversations are people having? people dont know what all of the possibilities are. most people cant imagine it. i also have a friend that tours the world. there are probably thousands that could do it if they werent conditioned to live life the way its always been presented to them.

I agree with this. I'm in my mid-30s and still don't know "what works for me," although I have no problem when it comes to not living within the societal box you described. I make my own way, but towards what purpose is still an open question, if that makes sense.

 

[Bud Boomer]

If I was given 6 weeks to live, I wouldn’t spend 30 seconds of it at work. I like my job, and I’d like to think I’m good at it, but work for me is the trade of time for money. Once I have enough money, I’m out.

 

[Pirata]

The trick is knowing when you have "enough".

 

[HALL85]

This is a good point and quite true. The generation that has graduated since, let's say 2015, has it so much easier in terms of opportunities and preparation/prospects/advice than those who are only a few years older than them.

I agree with this. I'm in my mid-30s and still don't know "what works for me," although I have no problem when it comes to not living within the societal box you described. I make my own way, but towards what purpose is still an open question, if that makes sense.

I don’t necessarily agree with that. Someone that showed the initiative to take any job in a tough financial crisis, persevered and wants to redefine themselves is going to be respected in the job market.

On the second point, no one ever has it all figured out, but if you can’t invest the time each year to evaluate where you are and what you want, you’re just setting yourself up for disappointment. Plans change, but without any plan, good luck. Tough to get a job when you can’t even remotely articulate what you want.

 

[Bud Boomer]

The trick is know when you have "enough".

Not an easy one. For me, at least, that number is going further and further down.

 

[SHUSA]

I don’t necessarily agree with that. Someone that showed the initiative to take any job in a tough financial crisis, persevered and wants to redefine themselves is going to be respected in the job market.

On the second point, no one ever has it all figured out, but if you can’t invest the time each year to evaluate where you are and what you want, you’re just setting yourself up for disappointment. Plans change, but without any plan, good luck. Tough to get a job when you can’t even remotely articulate what you want.

i think thats the problem. people cant articulate what they want because they dont know. a lot of people have no idea "what i want" is even a concept. a lot of people dont know why they wake up every morning. just have to work so they dont die.

 

[HALL85]

i think thats the problem. people cant articulate what they want because they dont know. a lot of people have no idea "what i want" is even a concept. a lot of people dont know why they wake up every morning. just have to work so they dont die.

That’s a pretty depressing post and those people need more than career counseling…

 

[SHUSA]

That’s a pretty depressing post and those people need more than career counseling…

thats my point. not surprised its news to you.

lets put it this way. ever heard the term "what do you want to be when you grow up?" an exercise at every school across the country.

why do we equate a job to who we are? why is it even a question? why not "who do you want to be", "what do you want your life to be?"

instead the society path is to focus on what you do to earn a paycheck.

 

[sami]

I worked 20 years in corporate finance, a well-paying grind with a long-ass commute to midtown Manhattan.

When I was laid off at 42 with 2-year-old twins, I accepted the fact that I’d likely work another 20+ years. Rather than be beholden to “the man”, I ripped the bandaid off, got my 7, 66 and life/health and took control as a financial advisor. Having 20 years at the world’s largest asset manager didn’t hurt the learning curve and the coin to weather the lean years.

So many in this profession “working” in their 60s and 70s, but I struggle to call that end game “work”. If turning over my book to a trusted partner in my 60s and taking a cut as a mentor as I play golf with my best clients and friends is working, it’ll go down just fine.

And let me tell you, I do financial wellness webinars for people in career transition. Teaching people basics like budgeting and expense management, navigating healthcare, managing your investments and 401k for retirement, risk mitigation through life, disability and long term care insurance is something I enjoy and damn if it shouldn’t be taught through high school and college. And that’s not even talking complex concepts like tax planning and estate planning, that’s just the basic shit you need to live your life through your career to take control of your later working years and retirement on your terms.

 

[anon_ezos2e9wn1ob0]

I worked 20 years in corporate finance, a well-paying grind with a long-ass commute to midtown Manhattan.

When I was laid off at 42 with 2-year-old twins, I accepted the fact that I’d likely work another 20+ years. Rather than be beholden to “the man”, I ripped the bandaid off, got my 7, 66 and life/health and took control as a financial advisor. Having 20 years at the world’s largest asset manager didn’t hurt the learning curve and the coin to weather the lean years.

So many in this profession “working” in their 60s and 70s, but I struggle to call that end game “work”. If turning over my book to a trusted partner in my 60s and taking a cut as a mentor as I play golf with my best clients and friends is working, it’ll go down just fine.

And let me tell you, I do financial wellness webinars for people in career transition. Teaching people basics like budgeting and expense management, navigating healthcare, managing your investments and 401k for retirement, risk mitigation through life, disability and long term care insurance is something I enjoy and damn if it shouldn’t be taught through high school and college. And that’s not even talking complex concepts like tax planning and estate planning, that’s just the basic shit you need to live your life through your career to take control of your later working years and retirement on your terms.

Awesome background Sami. Do most people really not have a monthly budget they stick to? That was the first thing I did when entering the workforce at 22.

 

[shu09]

Awesome background Sami. Do most people really not have a monthly budget they stick to? That was the first thing I did when entering the workforce at 22.

From what I've seen, most people don't. Most Americans have no clue when it comes to economics/money/personal finance, which is both sad and scary. I think it's crazy to not have a monthly budget.

 

[anon_ezos2e9wn1ob0]

From what I've seen, most people don't. Most Americans have no clue when it comes to economics/money/personal finance, which is both sad and scary. I think it's crazy to not have a monthly budget.

Yikes that's as bad as people that swipe the credit card with no plan on paying it off each month.

 

[HALL85]

Awesome background Sami. Do most people really not have a monthly budget they stick to? That was the first thing I did when entering the workforce at 22.

When we moved two years ago, we found the "budget book" from when we first got married (40 years earlier). We didn't have a pot to piss in, and tracked every expense, right down to the Dunkin Donuts coffee and bagel along with income for the month. I had forgotten it, but we showed it to our kids and we had some laughs about it. And we didn't have excel back then.

 

[SHUSA]

Yikes that's as bad as people that swipe the credit card with no plan on paying it off each month.

i dont agree. the credit card people are insane. there are plenty of people who make decent money , spend less than they make, but still dont have a plan. checking finances is prob the #1 anxiety inducing task and that needs to be addressed. it needs to start having a positive connotation of empowerement.

having a budget means you know what youre budgeting for whats the endgame and why. very few people have even a remote idea of that thay goal would be. and a fraction of that know how to budget for it.

 

[HALL85]

And let me tell you, I do financial wellness webinars for people in career transition. Teaching people basics like budgeting and expense management, navigating healthcare, managing your investments and 401k for retirement, risk mitigation through life, disability and long term care insurance is something I enjoy and damn if it shouldn’t be taught through high school and college. And that’s not even talking complex concepts like tax planning and estate planning, that’s just the basic shit you need to live your life through your career to take control of your later working years and retirement on your terms.

Here's a good example of building your "trusted advisor" network. I can speak firsthand with sami in terms of what he mentioned above. He's an expert, knows his stuff and willing to take the time. We all have that connection to SHU through this site (alumni, fan, etc.), and there are a bunch of sami's here that are accomplished as CFO's, business owners, etc. that would be happy to provide advice beyond their posts. You would be surprised if you asked....

 

[SHUSA]

I worked 20 years in corporate finance, a well-paying grind with a long-ass commute to midtown Manhattan.

When I was laid off at 42 with 2-year-old twins, I accepted the fact that I’d likely work another 20+ years. Rather than be beholden to “the man”, I ripped the bandaid off, got my 7, 66 and life/health and took control as a financial advisor. Having 20 years at the world’s largest asset manager didn’t hurt the learning curve and the coin to weather the lean years.

So many in this profession “working” in their 60s and 70s, but I struggle to call that end game “work”. If turning over my book to a trusted partner in my 60s and taking a cut as a mentor as I play golf with my best clients and friends is working, it’ll go down just fine.

And let me tell you, I do financial wellness webinars for people in career transition. Teaching people basics like budgeting and expense management, navigating healthcare, managing your investments and 401k for retirement, risk mitigation through life, disability and long term care insurance is something I enjoy and damn if it shouldn’t be taught through high school and college. And that’s not even talking complex concepts like tax planning and estate planning, that’s just the basic shit you need to live your life through your career to take control of your later working years and retirement on your terms.

"Teaching people basics like budgeting and expense management, navigating healthcare, managing your investments and 401k for retirement, risk mitigation through life, disability and long term care insurance"

this is amazing. many people , including myself, need this. are you the HSA guy too?

 

[shu09]

HSA is one of the best investments. Tax savings at the time of contributions, tax free growth and if you can afford to pay out of pocket for medical expenses today, you can track those receipts and use them to take tax free withdrawals down the road.

 

[SHUSA]

HSA is one of the best investments. Tax savings at the time of contributions, tax free growth and if you can afford to pay out of pocket for medical expenses today, you can track those receipts and use them to take tax free withdrawals down the road.

thus bringing in more complicated tax situation. maybe its time for an accountant lol.

generally, i need HSA for healthcare. its a high deductible account. feel like that gets glossed over.

 

[Pirata]

This is must read. Weighted toward real estate, but the overall focus on passive income is important.

Amazon product ASIN 1612680194

 

[shu09]

thus bringing in more complicated tax situation. maybe its time for an accountant lol.

generally, i need HSA for healthcare. its a high deductible account. feel like that gets glossed over.

I have a HSA. You certainly can contribute to it and use the funds to pay for medical expenses whenever you want. I was talking about using it more of an investment vehicle. If you can afford to pay those medical expenses out of pocket (not from the HSA) today, that's even better as you can do what I described above.

 

[SHUSA]

I have a HSA. You certainly can contribute to it and use the funds to pay for medical expenses whenever you want. I was talking about using it more of an investment vehicle. If you can afford to pay those medical expenses out of pocket (not from the HSA) today, that's even better as you can do what I described above.

i have to pay for it either way, i guess i figured if i have a $2k medical bill id want to use the money from the pre-tax HSA pool. i havent thought about what benefit that really gives me.

also, if i eventually put my fiance on the plan it probably changes everything.

 

[sami]

Awesome background Sami. Do most people really not have a monthly budget they stick to? That was the first thing I did when entering the workforce at 22.

You'd be surprised...

Also, the webinar focuses on some basic expense management. Like, discretionary vs. non-discretionary, managing your expenditures (call your cable company if you're with one and tell them you're canceling and streaming, see how fast you're paying less for cable bundle than streaming + internet), managing your healthcare premiums based on usage and taking full advantage of HSAs, renegotiating credit rates, etc.

You'd be amazed how many people don't realize what they're spending on totally useless discretionary spending. Uber vs. taxi in cities, starbucks vs. Wawa vs. make your own damn coffee, buying lunch daily vs. preparing 3-4X per week, restaurants, bars, and so on...

Many of the most affluent people I know are also the most frugal. And there is a big difference between frugal and cheap.

 

[sami]

i dont agree. the credit card people are insane. there are plenty of people who make decent money , spend less than they make, but still dont have a plan. checking finances is prob the #1 anxiety inducing task and that needs to be addressed. it needs to start having a positive connotation of empowerement.

having a budget means you know what youre budgeting for whats the endgame and why. very few people have even a remote idea of that thay goal would be. and a fraction of that know how to budget for it.

But that's easy... know what you want and end game?

basic financial planning
10-13% of income to savings, full stop. If you're starting later in life, increase it.
10-12% of income to insurance, including property & casualty, life, disability and long term care, depending on stage in life
there are plenty of other guideposts that you can follow based on age, but those two are very important.

create a conservative, liquid emergency fund of 3-6 months of living expenses

I can go all day with ways you should consider allocating income to meet your goals, whether or not you know what those goals are today. lol

 

[sami]

"Teaching people basics like budgeting and expense management, navigating healthcare, managing your investments and 401k for retirement, risk mitigation through life, disability and long term care insurance"

this is amazing. many people , including myself, need this. are you the HSA guy too?

HSA is a great tax/savings tool, especially if you've phased out of the Roth IRA range.

 

[sami]

I have a HSA. You certainly can contribute to it and use the funds to pay for medical expenses whenever you want. I was talking about using it more of an investment vehicle. If you can afford to pay those medical expenses out of pocket (not from the HSA) today, that's even better as you can do what I described above.

THIS.... 1000X over.

You should max your HSA ($3650 individual, $7300 family) and if possible, don't use it for current healthcare expenses. That can be used to pay high medical costs in retirement, the single greatest expense. HSAs can fund long term care premiums, Medicare premiums and a host of other large future expenses. And of course the large costs you may not necessarily be able to absorb.

 

[HALL85]

But that's easy... know what you want and end game?

basic financial planning
10-13% of income to savings, full stop. If you're starting later in life, increase it.
10-12% of income to insurance, including property & casualty, life, disability and long term care, depending on stage in life
there are plenty of other guideposts that you can follow based on age, but those two are very important.

create a conservative, liquid emergency fund of 3-6 months of living expenses

I can go all day with ways you should consider allocating income to meet your goals, whether or not you know what those goals are today. lol

Good stuff...I am always amazed when someone tells me that "they don't know what to do". We walk around with $1,000 supercomputers in our pocket and just need to ask Siri to find a multitude of answers.

 

[SHUSA]

HSA is a great tax/savings tool, especially if you've phased out of the Roth IRA range.

i may need to talk to you. ive tried
researching this online but im coming up empty. and im not even talking about tax implication part of it. im probably bad at wrapping my head around some things, but its coming across as complicated

 

[Pirata]

What he saying is that you can fund an HSA much like you fund an IRA. Any money you put into it you can invest and that investment will grow tax free. You don't have to spend it in a given year and you can continue to add funds up to the set limits year after year.

All contributions are free tax and so in any given year that you make a contribution you don't have to pay income taxes on the amount contributed.

If you have a medical expense you have the option to pay it out of pocket or pay it out of the fund thereby leaving the money in the fund to grow tax-free

What Are the 2022 HSA Contribution Limits? - GoodRx

Health savings accounts (HSAs) have grown in popularity. However, many people are not quite sure how an HSA works and how to use it to its full potential. Read more on how an HSA works, how it is different from other accounts, the contribution limits for 2022, as well as what you can and cannot...

www.goodrx.com

In doing so you could set up a long-term fund for health expenses. You can only use the money to pay for approved health expenses. If you use it for anything else there are penalties associated with the withdrawals.

 

[SHUSA]

What he saying is that you can fund an HSA much like you fund an IRA. Any money you put into it you can invest and that investment will grow tax free. You don't have to spend it in a given year and you can continue to add funds up to the set limits year after year.

Old contributions are free tax and so in any given year that you make a contribution you don't have to pay income taxes on the amount contributed.

If you have a medical expense you have the option to pay it out of pocket or pay it out of the fund thereby leaving the money in the fund to grow tax-free

What Are the 2022 HSA Contribution Limits? - GoodRx

Health savings accounts (HSAs) have grown in popularity. However, many people are not quite sure how an HSA works and how to use it to its full potential. Read more on how an HSA works, how it is different from other accounts, the contribution limits for 2022, as well as what you can and cannot...

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In doing so you could set up a long-term fund for health expenses. You can only use the money to pay for approved health expenses. If you use it for anything else there are penalties associated with the withdrawals.

thanks. i know the principles of HSA. i was alluding to different scenarios i didnt reveal.

HSAs are great if u have no medical expenses esp if u make it to 55/65. but theyre tied to HDHPs which are brutal. is that better than a PPO if you have frequent expenses? i guess i dont have to worry now, dont have a choice. i guess im curious as to the true benefit medically taken into account the HDHP.

 

[Pirata]

That is the crap shoot of medical plans.

For most people with medical plans through their employer they don't have a choice on the size of the deductible.

If you don't have insurance through your employer and you are picking a plan then you have to assess for yourself whether a high deductible and an HSA is better than a lower deductible and no HSA.

My understanding is the general rule of thumb is if you are young and healthy then take the high deductible and HSA.

For me, my deductible doesn't qualify me for an HSA but I do use the flex spending account which has a lower contribution limit and no ability to invest the money. I do get the tax advantage of pre-tax contributions to the flex spending.

 

[SHUSA]

That is the crap shoot of medical plans.

For most people with medical plans through their employer they don't have a choice on the size of the deductible.

If you don't have insurance through your employer and you are picking a plan then you have to assess for yourself whether a high deductible and an HSA is better than a lower deductible and no HSA.

My understanding is the general rule of thumb is if you are young and healthy then take the high deductible and HSA.

For me, my deductible doesn't qualify me for an HSA but I do use the flex spending account which has a lower contribution limit and no ability to invest the money. I do get the tax advantage of pre-tax contributions to the flex spending.

but FSA is use it or lose it. "healthy" is obviously a catch all term. i will visit the docs for structural injury this year, endoscopy, at the very least. my 1.5k deductible will be met easy. i have no PPO options. and i went with the more premium plan. an endoscopy is like $10k pre insurance. coinsursnce helps, but the best plans are the self funded plans where outpatient can be a copay of $150.

so, HSAs are great. but are they great if you intend on having to use the hdhp theyre attached to?