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Old 07-11-2019, 02:25 PM   #1  
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Default Noob questions

If I donít need health insurance (covered by wifeís), do I get the companyís cost of insurance in some other form?


I know itís a long shot but some companies do it...
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Old 07-11-2019, 02:32 PM   #2  
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You get the benefit of no benefit premium deductions on your paycheck.

Thereís no financial incentive for not going on a group plan.
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Old 07-11-2019, 02:39 PM   #3  
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Thanks...

Filler
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Old 07-11-2019, 06:25 PM   #4  
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Not sure what your exact situation is but you could consider dropping off your wifeís plan and going with our HRA plan by yourself. For an individual the HRA plan here is very good and has very low monthly premiums. Might save you some money depending on how much your wife has to pay to put you on her plan.
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Old 07-11-2019, 07:20 PM   #5  
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If it were me....

Enroll in the Spirit high deductible HSA. Since you donít need the medical insurance you donít need to worry about the high deductible, you use it as a vehicle for an HSA. The company contributes a $1000 for single, and you can add another $2500. Thatís $3500 a year that you can invest tax free and either use it as tax free withdrawals for future medical needs in retirement or you can take the money out for anything you want and just pay the taxes on it, like an IRA. No worry like an FSA and itís ďuse it or lose it,Ē you keep it year after year.

A great retirement vehicle when using the benefits of the HSA and not needing the medical
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Old 07-11-2019, 08:48 PM   #6  
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Originally Posted by Omniscient View Post
If it were me....

Enroll in the Spirit high deductible HSA. Since you donít need the medical insurance you donít need to worry about the high deductible, you use it as a vehicle for an HSA. The company contributes a $1000 for single, and you can add another $2500. Thatís $3500 a year that you can invest tax free and either use it as tax free withdrawals for future medical needs in retirement or you can take the money out for anything you want and just pay the taxes on it, like an IRA. No worry like an FSA and itís ďuse it or lose it,Ē you keep it year after year.

A great retirement vehicle when using the benefits of the HSA and not needing the medical
Not the plan I would be on with a family but this strategy sounds interesting for someone on a spouses plan at another company.

Wouldnít the cost of premiums eliminate any tax advantages of contributing to the HSA.
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Old 07-11-2019, 09:10 PM   #7  
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Not the plan I would be on with a family but this strategy sounds interesting for someone on a spouses plan at another company.

Wouldnít the cost of premiums eliminate any tax advantages of contributing to the HSA.
HDHP with HSA is $20 a paycheck for single. Thatís $520 a year, pre tax, say youíre in a 22% applicable tax rate, thatís $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, thatís 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, itís 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. Everyoneís mileage will vary

Last edited by Omniscient; 07-11-2019 at 09:21 PM.
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Old 07-12-2019, 01:04 PM   #8  
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Quote:
Originally Posted by Omniscient View Post
HDHP with HSA is $20 a paycheck for single. Thatís $520 a year, pre tax, say youíre in a 22% applicable tax rate, thatís $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, thatís 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, itís 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. Everyoneís mileage will vary
529 is not pre-tax money....
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Old 07-12-2019, 01:38 PM   #9  
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529 is not pre-tax money....
Never said it was.

Research 529 plans and tax drag.
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Old 07-12-2019, 06:45 PM   #10  
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All good info! Thanks.

Def going to keep wifeís plan (one of those Ďcadillací plans politicians complain about). Iím all about free money so Iíll go the HSA route.
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