HSA Mixup (Yikes!)

Still no net worth update, unfortunately.  Hopefully Mint will be able to connect before month-end.

Onto the topic at hand.  I’ve been messing with my HSA contribution in the last couple weeks.  Most of my contribution this year came from my bonus, but I added  a deduction from my remaining paychecks around September.  Clearly I didn’t really know how this worked, and changed it back to $0, then up to $5,000.  I was thinking the amount coming out of my paycheck for the remainder of the year was $5,000/24 (total number of paychecks HSA gets deducted from).  I had actually already contributed over $5,000 (with my employer contributions added) so I figured that either way, more than the annual maximum wouldn’t get taken out.  I was wrong.

So when I checked Mint last Friday morning, my paycheck was pretty much cut in half.  I checked my paystub and $1,250 had been taken out for my HSA.  Ooops.  The tiny paycheck I could deal with, but I’ve now contributed more than the annual maximum for this year into my HSA.  So I had to fill out some paperwork to get a refund of the overage, which will result in one more piece of paper I have to have in hand for filing my taxes next year.  But the good news is, next month my employer will add its monthly $50 contribution, and then I will be maxed out for the year, with no additional contributions from my paycheck for the next three checks.  And I should have about $4,000 in the account to carry over next year (barring my last two doctors appointments having a bunch of non-preventative lab work/tests).  Not that it matters for purposes of this post, but this account does not feed into my net worth, since I can only use it for medical purposes.

For next year, I’ll once again be putting in a large chunk from my bonus, and will potentially be adding a bit more throughout the year.  I definitely went back and forth on which health plan I should choose during open enrollment this year, but I think with the added HSA contributions from my employer for the high deductible health plan, and the MUCH smaller premium payments, the HDHP was the way to go.  I don’t know if it’s the case for all employer plans, but it looks like so long as I’m staying in-network (which I will certainly try to do), this is the cheaper option.  The benefits people recommended for those with the HDHP that you try to keep enough in the account to cover the deductible, but my goal is to have at least the out-of-pocket max in there before the end of 2016.

I also put about $200 into a limited purpose FSA, assuming any funds in there will get used for fillings, and if there is any left over I may think about getting a pair of glasses for night driving, but even if I were to lose it, it would be a pretty small amount of money (though it’s also possible that it all gets spent in the first half of the year).

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Bigger Paychecks ($87,335)

I’ve been messing with my payroll deductions since the beginning of the year.  In 2014, I had HSA contributions taken out of each paycheck–a decent amount in an attempt to ramp up my account to cover at least the deductible.  This year I decided to move that down to $0 per paycheck, and just have a lump sum taken out of my bonus.  Because I’ve been used to living with a certain sized paycheck, I wasn’t looking to increase my take home pay, but wanted to increase my retirement contributions with the extra money (and largely keep with the theme of pre-tax payments). For my lump sum HSA contribution, I contributed what I had hoped would be the maximum contribution for the year, taking into account my employer’s contribution, and the fact that I’m hoping the man gets a job with better/cheaper health insurance (errr… that the better option is cheaper/more subsidized by his employer than the better option that I have through my work is now), which would render me unable to contribute to an HSA for that part of the year.  Depending on what our family timing plans are, I may keep myself on the high deductible health plan for a year, and keep contributing to the HSA for as long as I can.  I digress…

I had moved my 401(k) contribution up to 10%, then back down to 9%, with $100 going to a separate bank account post-tax, to be moved into the Roth IRA I opened.  The first paycheck I received in February, the 9% contribution was implemented, but the $100 separate deposit had not yet, so this looked like more money in my spendable paycheck.  This paycheck, the separate direct deposit was in place, but my paycheck was still higher than usual.  Could this be my raise? Nope–adjustments from the last minute changes to 2014 taxes (and how much is taken out pre-tax). This change brought me another $90.  I’ll take it!

I’m not sure if it will be in the next paycheck, but I am waiting on a significant raise to show up in my paycheck.  After taxes and deductions, I’m hoping it will be an extra $100 which should reduce my reliance on tapping into my separate savings more often than I’d like (as I have been doing).  I may also potentially increase my student loan payments an extra $50 a month each month, which would be another $450 in principal payments this year.  Every little bit helps me get closer to my goal!