Quote:
Originally Posted by joey2665
I strongly disagree if you are in your mid 30s with 100k making 8% compounded over 30 years even without additional contributions is 1m. That’s significant and that’s without adding another penny. Additionally if you have it in a Roth IRA it is completely tax free.
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Those that have access to an HSA (Health Savings Account) should consider putting as much in there as possible. I believe the max for 2021 is $8,200. Do that year after year and it'll add up quickly. You are essentially self-funding at least part of your future health care needs and you are all but guaranteed to need a lot of money for that eventually. HSA's help take some of this burden off the table by offering triple tax advantages:
1. Contributions are tax free.
2. Investment growth is tax free (many plans offer a multitude of investment options).
3. Withdrawals are tax free provided they're used for qualified medical expenses.
Max out your 401K (the portion that's matched by your employer), invest remaining dollars into the HSA, more remaining dollars into a ROTH or traditional IRA, and if you still have dollars remaining, continue funding the unmatchable portion of your 401K. Select well diversified investments that reflect your risk tolerance.
Also note that there are annual limits to how much in total you can invest in tax advantaged accounts like this. I seem to recall that number being in the upper $50K area.
I know that many folks don't have access to these vehicles but I'm often surprised at how many do, yet fail to take advantage of them.