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HSA Contributions

QUESTION: Jamie in Omaha has stopped her Roth IRA contributions. What should she do with the money she’s putting in her health savings account (HSA) each month? She makes $42,000 a year, which includes her child support. Dave recommends continuing her HSA contributions until she hits her deductible amount.

ANSWER: I would probably keep doing that until you get to $2,500. Then if you%u219re not out of debt, stop it temporarily. Then you%u219ve got your deductible covered with your HSA account. I think that%u219s a better plan.

So really, you%u219ve only got basically $4,000 that this is going to help. The question is this: Can we do $4,000 and get to $2,500 and save up for a car in 18 months making $42,000? There are three goals there. I think you could hit them all three. That%u219s what I%u219m doing.

If you told me you had $20,000 in debt, we might have to think about this a little different, but the fact that your debt is very low or you%u219ve beat it down to this point . . . I think you really are a person who takes control of things, and that%u219s going to bode well for your future. It really is. It%u219s going to take you to some really cool places.

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