Originally Posted by
LeineLodge
1. Am I at risk of overfunding either the HSA or the VEBA, having a relatively long time to go until retirement?
2. If we do end up going with this VEBA program, should I stop funding my HSA to the max every year? If so, why?
3. I've heard lots of beyotching about the VEBA - almost exclusively on APC and Facebook. What's the big deal? At first glance, I don't see what all the heartburn is about. Maybe I'm missing something?
The nice thing about the HSA is that once you're over 65 you can withdraw funds for non-medical expenses without penalty. You'll just have to pay tax like you would on an IRA. If the VEBA program comes to pass my plan is to keep aggressively saving in the HSA. That way if I need the money for medical expenses it is tax free, and if I don't it is at least additional tax deferred retirement investing. I'd naturally use VEBA money first in retirement and keep HSA money in reserve until needed. I'm in about the same demographic as you and to be honest the VEBA sounds like it could be an advantageous tax shelter. At the same time I can understand the heartburn over some of the terms that apparently can't be addressed until the program is running and the IRS is petitioned.