Asklemmy

55532 readers

466 users here now

A loosely moderated place to ask open-ended questions

Search asklemmy 🔍

If your post meets the following criteria, it's welcome here!

Open-ended question
Not offensive: at this point, we do not have the bandwidth to moderate overtly political discussions. Assume best intent and be excellent to each other.
Not regarding using or support for Lemmy: context, see the list of support communities and tools for finding communities below
Not ad nauseam inducing: please make sure it is a question that would be new to most members
An actual topic of discussion

Looking for support?

Looking for a community?

Lemmyverse: community search
sub.rehab: maps old subreddits to fediverse options, marks official as such
!lemmy411@lemmy.ca: a community for finding communities

~Icon~ ~by~ ~@Double_A@discuss.tchncs.de~

founded 7 years ago

MODERATORS

40 year olds, what financial advice would you have for a 30 year old? (sh.itjust.works)

submitted 3 days ago by StarvingMartist@sh.itjust.works to c/asklemmy@lemmy.ml

89 comments fedilink hide all child comments

50 and older, I'm sorry, but in my personal experience, your advice has been a little out of date.

you are viewing a single comment's thread
view the rest of the comments

[–] jacksilver@lemmy.world 6 points 2 days ago (2 children)

They're both tax advantaged accounts - meaning you don't have to pay taxes on them in most situations.

HSA is supposed to be a Health Savings Account, but has turned into more of a retirement account. 401k is Americas sad replacement for pensions as workers need to contribute to it and so it largely only helps wealthier people.

The more general advice would be - make sure to save and invest money (preferably in ways that avoid taxes if possible).

[–] foxwolf@pawb.social 2 points 2 days ago (1 children)

Can you explain what you mean about the HSA being more of a retirement account? Can't you only use that money on medical or health related purchases? I understand the possible tax savings through an HSA, but I don't see how it could be a retirement account.

[–] jacksilver@lemmy.world 1 points 2 days ago

After you turn 65 there is no penalty for using your HSA for non-medical purchases, you just have to pay income tax on withdrawls. This effectively turns an HSA into an IRA after you turn 65. So you can contribute pre-tax, it grows tax-free, then you can withdraw without any penalty - making it effectively just another retirement account.

https://ourtaxpartner.com/hsa-distribution-rules-after-age-65-medicare-premiums/

[–] helix@feddit.org 2 points 2 days ago

Thanks a lot for the explanations!!! 🤩