The Retirement Planning/ Investment/ Savings Thread (11 Viewers)

[FordPickup92]

Hi - quick question
I reached out to my HR about changing my direct deposit account for my HRA funds. Previous years to current, my direct deposit account has always been my HSA account. My employer changed banks this year, and when I requested to update my direct deposit to my current HSA account I was told this was frowned upon. In the event of an audit I would exceed the contribution limits for pre and post tax dollars. I understand the black and white text, but can someone explain to me the why? I do not understand why I've had it set up this way for 5+ years and it's been no problem until now.

Edit to add: if using a standard savings account for the direct deposits moving forward, will I be required to report the HRA reimbursements as income?

 

[Josh Kifer]

I Yolo everything into NVIDIA. Thankfully I'm quite good at poker. That's all that keeps me afloat.

 

[CraigT78]

Hi - quick question
I reached out to my HR about changing my direct deposit account for my HRA funds. Previous years to current, my direct deposit account has always been my HSA account. My employer changed banks this year, and when I requested to update my direct deposit to my current HSA account I was told this was frowned upon. In the event of an audit I would exceed the contribution limits for pre and post tax dollars. I understand the black and white text, but can someone explain to me the why? I do not understand why I've had it set up this way for 5+ years and it's been no problem until now.

Edit to add: if using a standard savings account for the direct deposits moving forward, will I be required to report the HRA reimbursements as income?

HSA or Health Savings Account has an annual limit of $4300 for an individual and $8500 for a family.

HRA - is a health reimbursement account that only an employer can contribute to. This is for reimbursement of copays (and not real common I assume).

I'm confused by the rest of your post. Are you trying to direct deposit your entire paycheck to a HSA? Normally if you wanted to max it out, you put ~ $165 per check in there (assuming single)

 

[FordPickup92]

HSA or Health Savings Account has an annual limit of $4300 for an individual and $8500 for a family.

HRA - is a health reimbursement account that only an employer can contribute to. This is for reimbursement of copays (and not real common I assume).

I'm confused by the rest of your post. Are you trying to direct deposit your entire paycheck to a HSA? Normally if you wanted to max it out, you put ~ $165 per check in there (assuming single)

No. The HRA provides cash reimbursement for deductibles, co-pays, etc. They require a direct deposit for these reimbursements. Previously I've always had them deposited into my HSA account since I use that to pay medical bills.

 

[MrCatPants]

Hi - quick question
I reached out to my HR about changing my direct deposit account for my HRA funds. Previous years to current, my direct deposit account has always been my HSA account. My employer changed banks this year, and when I requested to update my direct deposit to my current HSA account I was told this was frowned upon. In the event of an audit I would exceed the contribution limits for pre and post tax dollars. I understand the black and white text, but can someone explain to me the why? I do not understand why I've had it set up this way for 5+ years and it's been no problem until now.

Edit to add: if using a standard savings account for the direct deposits moving forward, will I be required to report the HRA reimbursements as income?

Is it an independent HSA (e.g. not through your employer)?

 

[FordPickup92]

Is it an independent HSA (e.g. not through your employer)?

No, through my employer

 

[CraigT78]

No. The HRA provides cash reimbursement for deductibles, co-pays, etc. They require a direct deposit for these reimbursements. Previously I've always had them deposited into my HSA account since I use that to pay medical bills.

No idea then, completely different than my experience.

 

[MrCatPants]

No, through my employer

They way you are describing the situation sounds a little strange to me then. If it's employer sponsored it shouldn't really involve any sort of direct deposit form, they should be deducting your elected contributions and managing the contribution, and helping you stay below the tax requirements. Changing banks for payroll shouldn't really adjust this, either. Are you electing your contribution during open enrollment for benefits?

 

[FordPickup92]

They way you are describing the situation sounds a little strange to me then. If it's employer sponsored it shouldn't really involve any sort of direct deposit form, they should be deducting your elected contributions and managing the contribution, and helping you stay below the tax requirements. Changing banks for payroll shouldn't really adjust this, either. Are you electing your contribution during open enrollment for benefits?

No

 

[FordPickup92]

I'm not trying to put funds into an HRA. The HRA is paying me reimbursement funds via direct deposit.
My HR team is telling me I cannot use my HSA account as the receiving direct deposit account. I have been using my HSA account for these direct deposit reimbursements for 5 years. Now my HR team is telling me that doing so will push me over the allowed threshold for the HSA account.
I understand the reasoning behind why (additional HRA reimbursements on top of what is already being deposited into my HSA via payroll, will push the total amount of deposited funds in the HSA over the allowed limit)
I do not understand why this has been okay for the past 5 years of my employment, but now that we have a new bank providing the HSA account, it's no longer okay to deposit the HRA reimbursement into my HSA account.
I.e. my employer states there is a risk of audit. What I do not understand is whose at risk of being audited, me or them? My HR team has over funded my HSA account last year (did not withhold the last 4 deposits from my payroll) and I ended up paying taxes on that. But I've never had a problem with the HRA funds being added to the HSA account.

In my mind I always corresponded the HRA being a fund sponsored by my employer to reimburse medical expenses. The reimbursement comes via direct deposit, so it made sense to apply those reimbursements to my HSA account since I use that to pay for medical expenses.

 

[MrCatPants]

I'm not trying to put funds into an HRA. The HRA is paying me reimbursement funds via direct deposit.
My HR team is telling me I cannot use my HSA account as the receiving direct deposit account. I have been using my HSA account for these direct deposit reimbursements for 5 years. Now my HR team is telling me that doing so will push me over the allowed threshold for the HSA account.
I understand the reasoning behind why (additional HRA reimbursements on top of what is already being deposited into my HSA via payroll, will push the total amount of deposited funds in the HSA over the allowed limit)
I do not understand why this has been okay for the past 5 years of my employment, but now that we have a new bank providing the HSA account, it's no longer okay to deposit the HRA reimbursement into my HSA account.

In my mind I always corresponded the HRA being a fund sponsored by my employer to reimburse medical expenses. The reimbursement comes via direct deposit, so it made sense to apply those reimbursements to my HSA account since I use that to pay for medical expenses.

As direct deposit...were these moneys being deposited after tax dollars?

 

[FordPickup92]

As direct deposit...were these moneys being deposited after tax dollars?

The reimbursement deposits come directly out of the HRA separate from payroll deposits

 

[MrCatPants]

The reimbursement deposits come directly out of the HRA separate from payroll deposits

So theyve been letting you fund the employer sponsored HSA directly through direct deposit reimbursements from the employer sponsored HRA? I have not encountered this before. Is there a third party plan administrator? Was it the bank? (That may be why it was ok then and not ok now as the bank had all sides of the records.)

There are issues/restrictions on having both an HRA and HSA simultaneously as well. Could be the other issue is this switch forced them to contemplate what they were facilitating. Cleaner for everyone if theybare both just payroll deductions.

 

[FordPickup92]

So theyve been letting you fund the employer sponsored HSA directly through direct deposit reimbursements from the employer sponsored HRA? I have not encountered this before. Is there a third party plan administrator? Was it the bank? (That may be why it was ok then and not ok now as the bank had all sides of the records.)

There are issues/restrictions on having both an HRA and HSA simultaneously as well. Could be the other issue is this switch forced them to contemplate what they were facilitating. Cleaner for everyone if theybare both just payroll deductions.

Nope. They (employer) fund the HRA, and they (employer) also make an annual deposit into the HSA. I also fund the HSA via payroll. The HRA pays me directly, and I was adding that to the HSA account also. We are allowed to have both

 

[MrCatPants]

Nope. They (employer) fund the HRA, and they (employer) also make an annual deposit into the HSA. I also fund the HSA via payroll. The HRA pays me directly, and I was adding that to the HSA account also. We are allowed to have both

Yup - you can have both but the tax rules can get tricky.

May just be they don't want it automated and the likelihood of creating a tax issue (and want to have it be a traditional deposit tracked through the mechanisms that exist through plan administration). The plan I administer, we do allow people to contribute direct funds (and handle their taxes appropriately) to the HSA but it allows the plan to appropriately administer the maximums.

 

[inca911]

Just finished my Roth conversation for the year to fill the 24% bracket. Paid Fed and State taxes as required to avoid penalties via fed and state websites (always fun). This conversion will allow me to have more “invisible” income buffer for upcoming years to bridge 10Y to Medicare. Looking at using Roth IRA funds to buy Clorox, down $60 from 10Y high of $160 over the past year and sporting a 5% dividend. Need to do a bit more research and definitely welcome others’ opinions on CLX! Hope everyone is doing well and hopefully picking up some ideas from this thread. Still time to fund HSAs and contribute to Roth IRAs. Having many different options enables a lot of flexibility in retirement planning. Go get em!

 

[Poker Zombie]

Just finished my Roth conversation for the year to fill the 24% bracket. Paid Fed and State taxes as required to avoid penalties via fed and state websites (always fun). This conversion will allow me to have more “invisible” income buffer for upcoming years to bridge 10Y to Medicare. Looking at using Roth IRA funds to buy Clorox, down $60 from 10Y high of $160 over the past year and sporting a 5% dividend. Need to do a bit more research and definitely welcome others’ opinions on CLX! Hope everyone is doing well and hopefully picking up some ideas from this thread. Still time to fund HSAs and contribute to Roth IRAs. Having many different options enables a lot of flexibility in retirement planning. Go get em!

Analysts estimate CLX is will have an 8.6% decrease in revenue next year. I feel this accounts for the recent decline, so I would not consider this a "dip" or view the stock as oversold.

If looking for dividends, I prefer Edison (EIX). >5% dividend, and electricity is our future.

 

[Darson]

Have y’all been filing form 8606 with your Roth conversions? I didn’t know you had to do this and have been doing backdoor Roth for the last 5 years. There’s a $50 penalty for each year I failed to file and now I need to file the separately. Not even sure how to do this?!

 

[BNM]

Have y’all been filing form 8606 with your Roth conversions? I didn’t know you had to do this and have been doing backdoor Roth for the last 5 years. There’s a $50 penalty for each year I failed to file and now I need to file the separately. Not even sure how to do this?!

TurboTax automatically generates these. So, yes, I have. But only because TT automatically generates them.

 

[TX_Golf_N_Poker]

I use Block's software. I just double checked, and they also prepped Form 8606 for me last year.

 

[TX_Golf_N_Poker]

Just finished my Roth conversation for the year to fill the 24% bracket. Paid Fed and State taxes as required to avoid penalties via fed and state websites (always fun). This conversion will allow me to have more “invisible” income buffer for upcoming years to bridge 10Y to Medicare. Looking at using Roth IRA funds to buy Clorox, down $60 from 10Y high of $160 over the past year and sporting a 5% dividend. Need to do a bit more research and definitely welcome others’ opinions on CLX! Hope everyone is doing well and hopefully picking up some ideas from this thread. Still time to fund HSAs and contribute to Roth IRAs. Having many different options enables a lot of flexibility in retirement planning. Go get em!

I've looked at CLX in the past, but never invested. Combination of dividend and 5yr CAGR was always too low. Never seemed like the right time to me.

I've been buying some oversold Pharmas lately. PFE and NVO. And deeply oversold chemical co LYB. Although some analysts think their dividend (currently over 12%) is in danger of being cut.

Also taking a small dip into some chinese FinTech cos. QFIN and FINV. Both pay a nice divvy.

 

[BNM]

What are the payout ratios of CLX and all those others?

Typically a 12% dividend reflects massive pessimism by “the street”. What’s the contrarian argument for that dividend not being cut?

 

[TX_Golf_N_Poker]

huge What are the payout ratios of CLX and all those others?

Typically a 12% dividend reflects massive pessimism by “the street”. What’s the contrarian argument for that dividend not being cut?

LYB management has been adamant that they have no intention of cutting. Not that I'm relying on that with any huge confidence, but earlier this year they actually raised the quarterly amount.

Here's a post from Seeking Alpha, if you want to read more.
https://seekingalpha.com/article/48...ld-is-a-sign-that-someone-is-being-irrational

 

[BNM]

LYB management has been adamant that they have no intention of cutting. Not that I'm relying on that with any huge confidence, but earlier this year they actually raised the quarterly amount.

Here's a post from Seeking Alpha, if you want to read more.
https://seekingalpha.com/article/48...ld-is-a-sign-that-someone-is-being-irrational

Ah, that article is behind the premium membership wall, so I can’t access it anymore. That said, it is at/near 5-year lows (broader industry pressure it seems) and even if they cut the dividend in 1/2 that’s still 6%. And they are protective of that dividend, even taking on debt to pay it earlier this year. A little outside my risk comfort zone at this time but added to my watchlist. Thanks!

 

[DrStrange]

A company borrowing money to pay dividends should alarm long term investors.

Dividends are, among other things, a tool to decapitalize a business. It is one thing for dividends to be paid from earnings, quite another to take on debt to reduce owners' equity. Dividends can be a prudent tool for mature businesses that have modest needs for further capital investment - but again, taking on debt to return their investment to shareholders isn't the sort of thing a stable mature business commonly does.

A company with solid growth prospects can prudently reinvest earnings and earn its shareholders addition profits that lead to share price appreciation rather than returning their investments to them via dividends. Note this is tax efficient. As an investor, I can decide to hold my appreciating shares with no immediate tax consequences. I have no such choice with a quarterly dividend.

Having done no research on this company, I can't say harsh things specifically. I can say that I would be very careful to do extra homework before investing. A12% yield is roughly 4x of the yield of stable dividend stocks. Maybe major oil companies might approach 6% "safely" though at today's prices, oil companies are close to needing to borrow money to pay current dividends. There is a risk adjustment being made for a stock to offer a dividend yield of 12%. If you are buying, you should be quite clear what that risk is and decide you want to take it.

It has been 17 years since the last stock market reconning. It is easy to say it can't happen again. But such thinking will be proven wrong sooner or later. No free lunches. Something that looks too good to be true is often rotten at its core. Be careful out there -=- DrStrange

 

[MC_CPA]

I wanted to buy a barrel of chips but I didnt have US Dollars so I wrote a covered call on spy 3 days ago and now I have $110 bux lol. I love free money. Next time I might even write two calls to double it, and choose a lower strike.

 

[inca911]

So far things are going as planned! Healthcare coverage going smoothly at $71/M all in for medical, dental, and vision. High cost prescription was covered with little headache. Starting to look into how Medicare will work in 10 years with a supplemental coverage plan. Hard to look that far ahead, but gives me something to map this week. Not bored during my retirement and looking at how to give back to others. Sharing a little knowledge to my PCF friends is a start! Fun times, and slowly thinning the herd as it makes sense. I rarely play limit so six multi table set doesnt make a lot of sense….

 

[MC_CPA]

I wanted to buy a barrel of chips but I didnt have US Dollars so I wrote a covered call on spy 3 days ago and now I have $110 bux lol. I love free money. Next time I might even write two calls to double it, and choose a lower strike.

This ended up backfiring and I wouldve been $1,100 wealthier had I not done anything haha. Did not think SPY could rip that hard but it did. Thankfully I didnt double down.

 

[TX_Golf_N_Poker]

This ended up backfiring and I wouldve been $1,100 wealthier had I not done anything haha. Did not think SPY could rip that hard but it did. Thankfully I didnt double down.

Oooops.

 

[Darson]

Sometimes you get lucky but I’m not that guy. Pretty much every single short term punt I’ve made has lost me money. All the long term invest and leave have returned way more than I would have expected. Be it funds, individual stocks or real estate, long term investments have always returned well.

However I do like a gambol - I play poker after all - but it don’t play poker with my future. I’ll still make stupid punts though… but not with life changing money.