No. of Recommendations: 8
TMFBookNerd's article on the Health Savings for Seniors Act https://www.fool.com/retirement/2019/08/04/a-new-bill-could-... was a glowing review of the bill that seemed to be parroting what the bill's sponsors are touting, without any analysis. There are significant downsides to the bill, which she neglected to mention:

1) Seniors will no longer be able to use HSA funds to pay for Medicare premiums. Currently they are allowed to use HSA funds to pay for Medicare Part B, Part C and Part D premiums. This restriction decreases the amount of tax-free and penalty-free withdrawals that seniors are allowed to take, since they can no longer reimburse themselves for the premiums that are taken out of their SS checks (for those who get SS) and can no longer use their HSA as the source to pay Medicare premiums (for those who claim Medicare before SS).

2) The ability to use HSA funds without a penalty for non-medical expenses if you are 65 or older is being taken away. HSAs have long been viewed as a way to save additional money for retirement, and if you are lucky enough to not have a lot of medical expenses in your retirement, once you turned 65, you could use the HSA money like a Traditional IRA, and just pay ordinary income taxes on the withdrawals. The Health Savings For Seniors Act adds the penalty for those over 65, in addition to the income taxes, for any use other than for qualified medical expenses.

While the bill is good in that it may allow additional people to contribute to an HSA, it punishes those who have already been contributing to their HSAs by narrowing their ability to make tax-free and penalty-free withdrawals. TMFBookNerd needs to update her article to add the downsides, and actually take an objective look at the bill.

AJ

- And by the way, some way to comment on articles, like we used to be able to, or a way to contact the author directly would be nice, rather than having to post on this board.
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No. of Recommendations: 4
While the bill is good in that it may allow additional people to contribute to an HSA, it punishes those who have already been contributing to their HSAs by narrowing their ability to make tax-free and penalty-free withdrawals. TMFBookNerd needs to update her article to add the downsides, and actually take an objective look at the bill.

This affects me personally, as I've been relying on HSA as a cornerstone of my retirement. If you are a frugal saver--which TMF used to encourage--this is not an improvement.
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No. of Recommendations: 8
This affects me personally, as I've been relying on HSA as a cornerstone of my retirement. If you are a frugal saver--which TMF used to encourage--this is not an improvement.

Yes, it's a cornerstone of my retirement, too. That's why I was especially disappointed that TMFBookNerd didn't mention the downsides to the bill, and think that the article needs to be updated. And it's not like the information hasn't been out there. I posted about it on the Retirement Investing board a few days ago https://boards.fool.com/health-savings-for-seniors-act-34263... and CNBC had a big critical article about it https://www.cnbc.com/2019/08/01/medicare-recipients-cant-put...

AJ
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