Trump said he doesn't see a recession after the bond market spooked investors and the Dow suffered its worst day of the year last week.Marketsread more
Americans now say they approve of free trade by 64%-27%, a margin of better than two to one. That's up from 57%-37% early in Trump's presidency, and 51%-41% near the end of...Politicsread more
Trump said Cook made a "good case" that it would be difficult for Apple to pay tariffs, when Samsung does not face the same hurdle because much of its manufacturing is in...Technologyread more
The yield on the benchmark 10-year Treasury note briefly fell below the 2-year rate on Wednesday, a phenomenon in the bond market known as yield curve inversion, which is...Marketsread more
"I don't want to do business at all because it is a national security threat," Trump told reporters.Technologyread more
Despite aggressive strides, Waymo needs one thing before their self-driving cars become a seriously useful transportation system: people. We talked to the ones closest to it.Technologyread more
Trump's is due to visit Copenhagen early next month, when the Arctic will be on the agenda in meetings.World Politicsread more
The MacBook Pro recall and its subsequent ban from flights underscores the increasing brand risk from problems with lithium-ion batteries.Technologyread more
Experts say the timing of Amazon executives' contributions to Rep. David Cicilline likely reflect the company's heightened urgency over growing regulatory scrutiny.Technologyread more
CNBC combed through Wall Street research to see which stocks are still a buy after their earnings reports.Marketsread more
Coinbase security chief Philip Martin explains, "Possession of a key is possession of your currency. What that means is that you can't revoke a cryptocurrency key, if that key...Technologyread more
If you regularly contribute to a health savings account and plan to claim Social Security past your full retirement age, watch out.
That's because you can no longer contribute to an HSA once you're on Medicare, no matter whether you sign up just for Part A hospital coverage (which is free) or additional parts of the program that require premiums.
While this sounds straightforward enough, complications can arise for people who delay both Social Security and Medicare.
Here's why: When you delay claiming Social Security beyond your full retirement age, you're generally offered a lump sum in retroactive benefits of up to six months, dating no farther back than your full retirement age (which is 66 for most people right now).
If you're not yet on Medicare when that happens and are contributing to an HSA, there's the potential for issues.
"The problem is that if you take the lump sum from Social Security, it triggers Medicare Part A being effective retroactively as well," said certified financial planner Peggy Sherman, a lead advisor at Briaud Financial Advisors in College Station, Texas. "So if you made contributions to an HSA during that time, you face an excise tax of 6% on those contributions in addition to income taxes."
Anyone in that situation should remove those so-called improper contributions and alert your employer to remove any matching contributions made on your behalf, she said.
"That would need to be done by the tax return filing date for the year it's happening in," Sherman said. "If you sign up for Social Security this year, you have to remove those contributions by April 15 of next year to avoid the tax issue."
With more people staying in the workforce well into their 60s and 70s, it's a situation that's more likely to crop up as those workers put off claiming Social Security and enrolling in Medicare.
As long as you have qualified health insurance through work, you can delay going on Medicare without facing a late-enrollment penalty. This means you can continue contributing to your HSA in combination with a high-deductible health plan.
For 2019, the maximum HSA contribution is $3,500 if you have self-only insurance, and $7,000 for family plans. People age 55 and older are allowed to put in an additional $1,000. The money comes with a triple tax benefit: Contributions are deductible, the money grows tax-free and withdrawals are tax-free as long as they are used to pay for qualifying medical expenses.
Delaying Social Security also holds appeal: Your benefits grow by 8% each year you delay up until age 70.
The lump sum offered by the government, and retroactive Medicare coverage, depends on how far beyond your full retirement age you are when you claim Social Security. As mentioned, you can get up to six months' worth of retroactive benefits.
For example, say your full retirement age is 66 and you tap Social Security three months after your birthday. The government would offer to give you a lump sum worth those three months of benefits, which would make your effective date retroactive to your birthday. Sign up six months or more after your full retirement age, and you'll be offered a six-month lump sum for retroactive benefits and effective date.
If you think you'll accept a lump sum, you need to stop your HSA contributions before that retroactive date would kick in to avoid the tax complications, Sherman said.
She also pointed out that rejecting the lump sum — and retroactive effective claiming date — isn't necessarily a bad idea anyway.
"If they say we'll give you a lump sum worth six months and you say no, your base benefit will be 4% higher," Sherman said.
In other words, based on an 8% increase in your base benefits for each year you delay claiming Social Security, the effective date that's six months later would mean a permanent 4% increase in monthly benefits. If you were to take the lump sum, your base benefit would be pinned to that earlier date of claiming, making it less.
If your Medicare coverage becomes effective in the middle of the year, you can make HSA contributions that are proportional to the time you were still eligible to contribute. That is, each month of eligibility would be 1/12th of the maximum amount you can put in.
And of course, while you can no longer contribute to an HSA once you're on Medicare, you can use the money to pay for premiums, copays, deductibles and any other qualifying medical expense, Sherman said. Also, once you turn 65, there is no longer a 20% penalty if the money is used for nonmedical expenses.