Originally Posted by Omniscient

HDHP with HSA is $20 a paycheck for single. That’s $520 a year, pre tax, say you’re in a 22% applicable tax rate, that’s $405 a year once factoring in tax savings.

$405 gets you $1000 free money annually right from the start from the company. You can invest this money. $1000 invested at 35 with a 7% annual return will be worth around $8,000 at 65. Do that every year, that’s nice bit of cash when you retire. $405 instead invested in a 7% return will be worth around $3200 at 65. Not to mention you can now add your money as well to the max $3500 limit, compounding, so the HSA basically opens up another form of a retirement stash for you. You even have a catch up option for more money when you get older.

What if you invest $3500 a year into this, $1000 from the company and $2500 from you. 30 years at 7% will get you
$380,800

The $405 in premiums spent for the non needed medical will cost you $44,000 in opportunity investment cost

Difference is $336,000. So the numbers work.

Talk to Delta guys and see what they do. Too many Spirit guys still think that maxing our their 401(k) is the goal. Delta guys? They max it out, open up IRAs for them and the spouse, back door it, mega Back door it, invest in their HSA, and a lot even contribute heavy to their kids 529 plan; because in addition to saving for their kids college, it’s another great retirement savings tool to help avoid tax drag in investing.

I guess for some it comes down to when you want to retire and how you want to retire. You can buy a big boat today or a really big boat tomorrow. Everyone’s mileage will vary