August 12, 2025 • 30 mins
Book a Call: https://directedira.com/appointment/
Alternative Asset Summit Tickets: https://altassetsummit.com/#ticket
In this episode of the Directed IRA Podcast, Mat Sorensen and Mark Kohler unpack one of the most overlooked yet powerful tax-advantaged accounts available—the Health Savings Account (HSA). Often dismissed as a simple medical savings tool, the HSA actually offers a triple tax benefit: tax deductions for contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses—at any age.
Mat and Mark explain how to qualify for and fund an HSA, the contribution limits for 2025 (including catch-up contributions), and why they rank the HSA alongside the Roth IRA as a top wealth-building priority. They also reveal how you can invest your HSA beyond savings accounts and mutual funds, using a self-directed HSA to buy assets like real estate, crypto, livestock, and private investments—keeping all gains in the account tax-free.
Through real-life examples, including ranch cattle investments and rental properties, they illustrate how creative investors are compounding returns inside their HSAs for future medical costs. They also discuss strategic withdrawal planning—why delaying reimbursements can supercharge your tax-free compounding—and review what qualifies as a medical expense under IRS rules, from dental work and prescription drugs to service animals and long-term care premiums.
If you’ve ever thought an HSA was just for paying your doctor bills, this episode will change your perspective and show you how to turn it into a dynamic, tax-free wealth-building vehicle.
Chapters
- 00:00 - Introduction to HSA Triple Tax Benefit
- 02:09 - HSA Eligibility and Contribution Limits
- 10:30 - Self-Directing Your HSA Investments
- 16:14 - Livestock and Creative HSA Investments
- 20:56 - Reimbursing Medical Expenses Strategically
- 25:30 - Qualifying Medical Expenses and Planning
- 30:15 - Final Tips and AltAsset Summit
Directed IRA Homepage: https://directedira.com/
Directed IRA Explore (Linktree):
Directed IRA Homepage: https://directedira.com/
Directed IRA Explore (Linktree): https://linktr.ee/SelfDirectedIRA
Book a Call: https://directedira.com/appointment/
Other:
Mat Sorensen: https://matsorensen.com & https://linktr.ee/MatSorensen
KKOS: https://kkoslawyers.com
Main Street Business https://mainstreetbusiness.com
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:08):
Welcome everybody to another episode of the Directed
IRA podcast.
My name is Mark Kohler aka fortoday's show, John Dutton, and
I'm here with Matt Sorensen, theamazing CEO of Directed IRA and
the author of the Directed IRAHandbook, and I'm just going to
leave it out there as a teaserwhy we're talking about John
Dutton and Yellowstone, becausethis topic is about HSAs and you
(00:31):
don't even know the hiddenbenefit yet.
It's going to blow your mind.
Speaker 2 (00:35):
Yeah, if you want to own cows in your HSA, maybe you
could do that.
I'm just saying maybe you coulddo that.
We'll get to that.
So we want to talk about thehealth savings account.
I know you might be like that'snot very exciting, guys.
This is an incredible taxstrategy.
It's a way to save on taxes.
We all have medical, butthere's also an incredible
investment strategy you'reprobably not aware about, which
(00:56):
is using an HSA to invest inassets you know and believe in.
So we're going to talk abouthow do I get money in an HSA?
Why does that help me on my taxreturn right now?
How do I invest it and grow it?
And we got some incredibleopportunities for you to think
about.
We're not just talking aboutputting in a savings account or
even buying a stock, mutual fundor ETF.
And then, third, we want totalk about getting money out of
(01:17):
that and accessing that, andmedical being one of the most
common expenses you're going tohave later on in retirement.
Speaker 1 (01:22):
We all have medical through our lives, so we're
going to talk about actuallyaccessing that and how we're
doing that in a tax advantagemanner as well, and I want to
give you guys another couple ofhooks on this.
The number one reason forbankruptcy in America medical
expenses.
The number one reason peoplepull money out of their
retirement account medicalexpenses.
(01:42):
Medical expenses are growingagain at an exorbitant rate.
We have the Maha movement.
We're hoping the RFK might beable to do something to bring
down the costs of healthcare,but we need to take control of
our healthcare costs by payingcash.
We don't have to rely on theinsurance companies.
(02:04):
We can control our own destinywith our HSA accounts.
There's so many hidden benefitshere.
Speaker 2 (02:09):
Here's what I want you to think about for the HSA.
I want to just lay it out therequick.
There's a triple tax benefit tothe HSA.
You get a tax deduction whenyou put the money in.
As you invest it and grow it,you pay no taxes.
It's growing, Every penny getsto be reinvested and continue to
grow.
And then there's no tax whenyou pull the money out for
qualifying medical.
You don't need to wait tillyou're later, at 59 and a half
that's at any age and so it'scalled sometimes the triple
(02:32):
threat triple tax benefit.
Speaker 1 (02:34):
HSA.
There's no other account likethis.
With the Roth you have to paytax, then put the money in.
Okay, I get twofer With an IRAor 401k, I get a deduction on
the way in, but then I got topay tax on the way out.
So I get another twofertax-free or should say
tax-deferred growth and thenI'll pay tax later.
(02:55):
But with the HSA you get allthree and then another bonus.
There's no AGI limitations.
There's no income limitations.
It does not phase out, it is onthe front page of your tax
return.
I guess I can't think of abetter tax deduction for any
American in this country that'son the front page of a tax
return than the HSA.
Speaker 2 (03:15):
Yeah.
So now let's hit some of theways you get the money in.
You can put 4,300 bucks in ayear this is 2025 if you're
single, $8,550 for those thatare married.
This is contribution in adeduction on the front page of
your tax return.
Like Mark says, you don't haveto itemize.
You get this deduction on thefront page of your return.
Whether you take the standarddeduction or itemize, you're
(03:35):
going to get that.
Now to qualify, you must have ahigh deductible plan, all right.
So if you have a gold plan, forexample, or if you have a
Cadillac plan a really nicehealth insurance plan you can't
do an HSA, sadly.
So you must have what's calleda high deductible plan.
Now, under the one bigbeautiful bill, one of the
(03:56):
changes was any bronze planqualifies now as a high
deductible plan and there aresome rules on that.
Most plans, when you have them,they will say HSA eligible.
Even here at our companies orour own employees, we have an
HSA eligible option and a healthplan.
Or you have that's usuallycheaper or you have a more cover
(04:17):
, everything lower deductibletype plan, which is typically
more expensive.
Speaker 1 (04:21):
Yeah, and another way of approaching this insurance
issue, if I may, is don't worryabout these metals bronze, gold,
platinum plan, whatever.
When you're shopping forinsurance, whether you're on the
state network, the federalnetwork or using an independent
insurance agent and we all threeare alive and well in the
(04:43):
country helping people gethealth insurance just make sure
it's a qualifying HSA plan.
That's all you want to ask.
Is this a qualifying HSA planFor those out there that like a
little extra info?
That deductible limit has to beat least $1,650 if you're
single or $3,300 if you'remarried.
Now, you may be like, if you'resingle, or $3,300 if you're
(05:07):
married, now you may be likeholy crap, I got to come out of
pocket for $3,300 with my healthinsurance plan in order to have
an HSEA.
Yes, now here's.
Here's the okay part.
Most people don't even use theirhealth insurance and so if
you're unhealthy, you're goingto go after a different type of
plan.
But I think statistics are now70% of people don't even tap
into the full deductible, evenwith a normal HMO type plan.
(05:30):
They buy health insurance forthe catastrophic problems.
Oh no, I broke a leg or I haveto have surgery or I got a
terrible disease or some ailment.
That's when insurance reallyshould be there for us and we
overdo it.
We're buying oftentimes healthinsurance we don't need.
So just get the right type ofplan and realize that you're
(05:52):
putting away money and savingsto cover the deductible and if
you don't use it, that money'sgrowing for you forever.
Speaker 2 (05:59):
Yeah, and those plans you'll still have, like office
visits for smaller amounts andthe co-pays, and so you're still
getting that coverage andbenefit there.
It's just for when you arecoming out of pocket you'd have
to hit those limits Again.
$1,650 single, $3,300 or somarried it's not that high of a
deductible actually so but thisis also, we've said,
particularly for those that arehealthy.
(06:20):
Hsa is an incredible optionno-transcript money into it
(06:51):
because it has such anincredible tax benefit.
As we said, it gives you thetriple threat is the only one
where you get the triple threatdeduction tax-free growth
tax-free distribution Yep.
Speaker 1 (07:01):
Now a couple of more thoughts on this first part of
just getting money in there.
Tax-free distribution Yep.
Now a couple of more thoughtson this first part of just
getting money in there, becausethere's a lot here and we've got
other podcasts on our sisterchannel, main Street Business
Podcast, where we dedicatealmost an hour to the HSA topic
every year, especially in thefall when it's that enrollment
period.
So you want to be choosing theright type of insurance during
that time period.
But a couple of other thoughts.
(07:22):
Once you turn age 65 and areeligible for Medicaid, you can't
open a new HSA.
You can keep investing the oneyou started previously, but you
can't open a new one or put newmoney in when you pass go every
year in January.
But whatever that bucket is,you can continue to invest it
and pull it out tax-freewhenever you want.
Another thought aboutcontributions is is I like what
(07:46):
Matt brought up?
Is the strategy?
The sequence for me is any ofyou at work that have a 401k
matching program, get the match.
I mean that's doubling yourmoney.
Now it's only going to be 2% or3% of your salary.
Don't shoot for the stars onwhat you could put in the 401k.
Just get the match Double yourmoney.
Then get out and sit back andgo.
Okay, where else do I want todeploy my savings?
(08:09):
The Roth IRA and the HSA thosetwo are going to be right up
there in the second or thirdposition.
Then we're going to startlooking at going back to the
401k, maybe putting in more,maybe we're going to look at a
rental property.
So, with a strategic approach,you're really building these
multiple buckets fordiversification, asset
(08:29):
protection, and this money isbuilding for the number one cost
that you're going to face inlife.
Speaker 2 (08:37):
Yeah, a couple other things.
If you're 55 or older, you getto put in an extra $1,000 a year
.
It used to be kind of clunkyhow you did this.
That was one thing in the onebig beautiful bill that was
fixed on this, where if you aremarried and have a family, hsa,
and both of you are over 55, youcan each put the extra $1,000
in.
Before you used to have to bothgo do single to do that, where
(08:59):
you can double up on the on thecatch up there for the extra
thousand.
Speaker 1 (09:03):
You can put the 2000 in now in a married plan if
you're both 55 or older.
Love it.
There you go.
Exactly One of the things.
Speaker 2 (09:09):
if one of you is only over it, then one of you can
just do the thousand.
If you're both over, you can.
You'll get the 2000 into thatmarried HSA.
Speaker 1 (09:18):
Yeah, I love.
Other thing on contributionsthat I think is important
everybody knows this is not aself-administered account.
You're not going to just goopen a bank account and say, oh,
that's my HSA.
This is the one where you haveto use a third-party type
administrator that's going tomanage this account for you.
There's companies out therethat'll give you a debit card
with it if you're going to putthe money in and pull it right
back out, which is fine.
(09:38):
But for those who can let themoney ride, we're going to come
to part two here, which isinvesting that money, letting it
go.
So you're going to open anaccount.
It does not have to be with theinsurance company.
It does not have to be withyour employer.
This is totally portable.
You can take this accountanywhere you go, as long as you
have the right type of insurance, you can throw the money in.
If your employer throws alittle in, great, you can put in
(09:59):
the rest up to those limitsMatt mentioned earlier.
Speaker 2 (10:07):
So, yeah, man, investing this is your favorite
part, yeah, this is the bestpart of it.
And I think so many people missthis step is they think, oh,
I've got this HSA and it's justsitting in a savings account at
some bank making nothing.
What are you doing?
You got to be engaged in this.
You can invest that money, youpay zero tax on the returns on
that and that comes out entirelytax-free to cover your medical
which, by the way, I'm going totell you, don't pay your medical
(10:28):
, reimburse it out later, andwe'll get to that in a second
here.
But as you're investing thatmoney, I want to be focused on
growing that, doubling it,tripling it, so you have a
bigger bucket, because we knowthis is going to be a big
expense as you hit retirement,like long-term care, medicare
coverage that you pay for out ofpocket, like you can use your
HSA for that stuff, of coursedental there's so many things
(10:48):
you're going to be able to coverfor this during your lifetime
that you can reimburse yourselfbackwards to even the stuff
that's occurred over yourlifetime as you've had an HSA.
So we want to get a big HSA atthe end of the day.
Now let me just cut to the chasehere.
My HSA owns crypto.
Now you're like wait, you can,I own Solana in my HSA.
You can own Bitcoin or Solana,you can, actually as an
(11:10):
investment asset.
Yeah, okay, now we have acrypto HSA directed IRA, which
is what we do here at ourcompany.
Directed IRA.
You can own real estate andother cool things with your
health savings account.
So we're not just talking aboutinvesting in a stock you could
or a mutual fund you could.
(11:31):
We're talking about investingin things that you believe in
and think can grow exponentiallyto grow that HSA.
Speaker 1 (11:34):
Yeah, I was so excited to talk about this today
because I and I mentioned JohnDutton for fun in my
introduction.
But my wife and I recentlybought a ranch.
I call it a ranch.
It's a piece of land.
Right now You've got to startdoing stuff on it to actually
call it a ranch, but we'retrying.
It's land with a trailer.
We bought a ranch and in thislittle valley we've gotten to
(11:57):
know other ranchers and farmers,of course, gotten to know other
ranchers and farmers.
Of course you go down and hangout at the grill or the little
cafe on Saturday mornings, Matt.
Speaker 2 (12:10):
That's the trick.
Just want to give you a littlepro tip there.
That's where you get what'sreally going on in town.
Speaker 1 (12:14):
Yeah, we hit the county fair, the junior
livestock auction, all thosegoodies.
But anyway, I asked thisrancher down the street.
I said, hey, can I buy a fewcows in your herd?
Now, this was last fall, rightbefore the presidential election
and the Maha movement with RFKwas starting to gain more
(12:34):
traction, grass-fed beef,hormone-free beef and a little
more health-conscious beefconsumption around the country,
whatever.
But he said, sure, it'll be onhis land, he'll manage them
amongst his other herd.
And he's like how many cows doyou want?
And I go, how much are they?
He's like well, you can buy apair that's a mom and a heifer,
(12:59):
I'm sorry, a heifer and a calf,it's called a pair for about
$3,500.
And he told me how much hewould charge to take care of
them on the range.
And then in the fall and wepenciled it out and Patty and I
combined our HSAs, created alittle LLC and we have been
(13:20):
contributing to our HSA the lastfour or five years.
So we have 30 or 40 grand inthere and we bought nine, 10
pair and so we have 20 plus cowsthat we, when we drive through
the valley, we can look over andgo hey, those are our HSA cows
and hormone free grass fed, andwe could already sell those
(13:41):
pairs for about 4,500 to 5 grandright now, just six months
later.
Now we're going to go throughthe fall.
They're going to fatten up toabout 1,200 pounds each those
calves, and we're selling thelivestock auction in the spring.
But we're going to have a 20,30, 35% return on these cows
inside our health savingsaccount.
How ironic is that Maha meatinside a health savings account?
(14:03):
We just think it's so fun.
And that's just an example ofgetting creative.
You could do notes, you can doloans, you can invest in a small
business down the street in aneighborhood that you're excited
about, a business.
Let your HSA participate inthat, and all that profit is tax
free.
Yeah.
Speaker 2 (14:20):
And your HSA is also on the rental property.
Speaker 1 (14:23):
Yeah, that's right I've got.
10 years ago I bought a littlemeth lab with my HSA.
There's the irony there, butanyway, it's adorable for the
low-income housing deal out inChicago area but it's still
rolling.
Speaker 2 (14:37):
Those are non-prescription drugs.
Doctor's not necessarilywriting a prescription on those.
I might clarify on the HSA here, but I think what we're talking
about here is self-directing.
If you're new to this show,we're talking about your IRA,
your HSA, your tax advantageaccounts.
When you go and invest them,you don't just have to buy a
(14:58):
stock or a mutual fund or an ETF.
That's not the only investmentoption.
That is when you have abrokerage HSA or IRA.
But if you have a self directedHSA, which you can open a new
one, put new money in.
You can transfer it fromfidelity or health equity or
wherever your HSA accounts at.
You can transfer that existingmoney your employer's health
savings account.
You can always move that, thatmoney that's just sitting there,
(15:19):
probably in a savings accountor some mutual fund you don't
even know what it is.
You can transfer that todirected IRA and invest it in
crypto, invest it in you knowlivestock real estate, whatever
it is you're interested in.
These assets are available toyou using a health savings
account and the goal here, ofcourse, is we're going to grow
the HSA, those returns on thecrypto.
(15:40):
That goes back into my HSA.
It grows it, the return on thelivestock when Mark sells the
cows.
That's putting return andinvestment gains back into the
HSA.
The rental income on theproperty on his HSA, the gain
when he sells it, that'sbuilding up the HSA account
balance.
No tax, there's no tax on that.
You're going to keep everypenny back in that HSA.
(16:00):
It's growing that balance, soyou're having that those funds
available for your futuremedical.
Now of course, we'll talk aboutusing the money here in a
second.
You can draw it out now if youwant to.
But why not keep investing incompounding in that tax
advantage account?
Draw the money out later unlessyou really really need it.
Yeah.
Speaker 1 (16:17):
Before we hit this third phase.
If it's all right, I'm going togive a shameless plug.
If you go toKohlerBritCattlecom that's
K-O-H-L-E-R, kohlerbrit,b-r-i-t-t, cattlecom you can
pre-buy for a nominal fee theright to buy one of these 10
(16:39):
grass-fed, hormone-free calvesin the spring, and we've already
got a handwritten waiting list.
But we launched the websitethis week.
Actually, it's funny, matt.
Matt was the one that wanted totalk about HSAs and I'm like, oh
my gosh, I can talk aboutcolibrick cattle, but it's hard
to find cattle to buy that youwant to have processed and
butchered and split amongstfamily or friends or neighbors,
(17:00):
because these are like 600, 700pounds of beef when you process
a cow that big.
So if you're interested in thatand you want to watch our live
roundup in 10 days, we're goingto be doing it with webcams and
you can watch and see us movethe herd about a mile and do
(17:20):
some branding, and so if youwant to watch us on the live
webcam and see the roundup, youcan get to the Kohler Brick
Cattle Company website.
It's going to be a lot of fun.
So we'll have a link down thereon the page too.
But I'm so excited to build thevalue of the HSA so that I can
pull it out when I want to, notwhen I have to.
(17:41):
And this is an exciting thingbecause, matt, I love how you've
talked about this and I kind oflearned this from you is that I
don't have to go have a debitcard to go to the doctor.
I can just keep track of mymedical expenses and then
reimburse myself later and gosh,I think that rule you can
collect those receipts for years.
Speaker 2 (18:02):
Yeah, I mean, that's the nice thing about the HSA is
like, as long as you've had theHSA, you don't have to pull the
money out.
Now, let's say you have medicalin 2025.
You have 5,000 of medical andyou're like, well, I could pull
that out of my HSA and coverthat.
Why would you do that?
Why would you take money out ofa tax advantage account?
When you invest it and grow itand you pay no tax to go cover a
(18:24):
medical bill, you already gotthe deduction.
When you put the money in,you're not paying taxes.
You're growing it.
Spending it out of the HSA isthe last thing you want to do,
because just pay for it moneyout of another pocket of money.
Pay for it out of your regularchecking your savings account.
Don't pull the tax advantagefunds out Now.
Money out of your regularchecking your savings account.
Don't pull the tax advantagefunds out Now.
(18:44):
You might be like well then, howam I ever going to get the
money out of the HSA?
Take it later, let that moneycompound and grow in a tax
advantage way where every pennyof gains and investment returns
you have, you get to reinvestwith no tax.
But the rule for HSA is, let'ssay, 10 years later.
You're like well, now I want todraw up some money out of this
thing.
I'm in retirement or myincome's down now, and I want to
start drawing on this HSA.
(19:05):
And now it's in 2035.
Well, can I only take outmedical that I have in 2035?
No, all the medical you had inthe last 10 years.
You just track it.
You can pull it out 10 yearslater, in 2035.
That 5,000 in 2025 you had that.
You decided to let stayinvesting, and now that 5,000
(19:26):
represents 20 or 30 grand fromall the investment returns and
gains.
Pull that five grand out laterin 2035.
And so it's about being alittle more strategic about it.
A lot of our clients who aretax savvy take that approach
where they're like why on earthwould I drain money out of this
tax advantage account to covermedical?
I got the tax deduction alreadywhen I put it in.
Speaker 1 (19:49):
I love your example, but I will say why in the world
would you do it?
There are a few listeners whodon't have another pocket full
of five grand.
Obviously, obviously Somepeople are like, I need it.
Speaker 2 (20:01):
The other pocket and I've done that and I think
that's kind of the even my ownHSA.
You know, when I was in my late20s and 30s and I had an HSA, I
only put money in to take itright back out.
Right, I had a $2,000 medicalbill or something like that, or
my kids needed braces.
I put the exact amount into myHSA and I took it right back out
(20:24):
because I need the deduction.
That's the way you have to doit.
You got to launder the moneythat way if you want the
deduction.
But that was coming right backout.
But then my mindset shiftedbecause I'm like I don't need to
draw it out.
I can start saving andinvesting my money.
Yeah, would I do that?
in a brokerage account no, usethe HSA no tax.
Speaker 1 (20:42):
Yeah, so, so powerful .
Now let's answer what can youtake it out for?
Now this has actually gottenbroadened with recent
legislation, but let's juststart with the baseline IRS
publication 502.
You can Google it, put it onyour desktop on your laptop.
You can Google it, put it onyour desktop on your laptop,
(21:02):
print it out.
It's kind of thick but it's gota great index and it goes
through every possible medicalexpense Dental, eyes, physical
therapy, chiropractic,prescription drugs and
everything that could or willnot be allowed to be reimbursed.
But the list is much, muchbroader than you may think.
(21:25):
I had some clients that had anautistic child and they were
doing special education, therapyfor speech therapy and all
sorts of things all coveredunder the HSA or deductible
under an HRA, a 105 plan, awhole other concept because they
were a small business owner,because they had even more
(21:49):
expenses than their HSA couldcover.
But what you can pull out foris just a laundry list and in
2020, with the CARES Act, itallows now over-the-counter
drugs and even teletherapy andall sorts of non-prescription
expenses that you can getreimbursed through your HSA.
So that's really exciting,because I would just make this
(22:09):
recommendation, as Mattreferenced have a spreadsheet
somewhere or a file or a folderof your paper mindset or
paperless mindset, whichever oneit is.
Have somewhere where, at theend of the year, you get a
report from all the doctors orpharmacies you may have visited.
Maybe estimate what you spentat Walmart or Target on
(22:30):
over-the-counter drugs aspirin,advil, tylenol, whatever Kind of
do a little schedule.
Here's what I spent in 2025.
Speaker 2 (22:39):
Just put it somewhere Done and that's like a tax-free
ledger that someday in thefuture you can just go grab it
and done so yeah, and I thinkeven with us at directed IRA,
you know we're not saying youhave to use the debit card to
spend it out, so many people areused to that.
No submitted expense submittedsubmitted distribution request.
(22:59):
Tell us that it was forqualifying medical expenses and
we send you the money.
We report it as a you know thatit was a distribution to you to
reimburse you for qualifyingmedical, not taxable.
Now, one big thing that happenedin the one big beautiful bill
that was a buzzkill was theystripped out of early provision
(23:19):
that said gym memberships wouldbe able to be an expense in your
HSA and that was going toqualify as a medical expense.
Sadly, in the final bill thatwas snuck out.
I thought it was a lame movebut because that would have been
cool, you could have coveredyour HSA, could have paid for
your gym membership, which makessense.
We need to get people, you know, focused on that and a healthy
(23:40):
lifestyle.
But that was pulled out.
So if you see any in there thecommentary on that, even my own
videos or any of the stuff likethat just know that the
qualifying medical expense for agym did not make it into the
final one big beautiful bill.
Speaker 1 (23:54):
Yeah, now there is some strategic planning here,
kind of gray area planning.
I don't want to say gray, justinterpretive planning.
Let me reference a couple otherpublications you'd want to
consider Publication 969.
The IRS website has so manyresources on this Code, section
(24:15):
213D, which is going to allowfor long-term care coverage
insurance.
Your HSA can start paying forlong-term care expenses or
insurance and there's a lot ofcase law out there that the
courts have said the tax courthas said if a doctor prescribes
a certain therapy, like you needto go swim every day for
(24:38):
physical therapy.
There's cases and we've hadclients that have put in a
swimming pool, one of theseMichael Phelps-type lap pools
for physical therapy and theirHSA has paid for it or they've
deducted it as a medical expense.
So that's something you need towork with your accountant on
and make sure you understand therules and having a bona fide
(25:00):
prescribed method ofrehabilitation or therapy.
And it can be deductible underthis as well.
Speaker 2 (25:07):
Absolutely yeah, they call it letter of medical
necessity.
So if your doctor, physician,healthcare provider gives you a
letter of medical necessitysaying this is medically
necessary for you for physicaltherapy, you could have.
A gym membership is definitelysomething that you would be
eligible for because of sometype of illness or disease or I
(25:29):
don't know.
It could be a weight issue.
Even that could be causing somemedical problems.
So you can doctor then, butit's not an automatic gym
membership qualifies right now.
Speaker 1 (25:40):
Now what I love about this, matt, too.
I just want to add anotherinterpretive issue, and that is
service animals.
The CARES Act did notspecifically address emotional
support animals as allowablemedical expenses that can be
reimbursed for through aflexible spending account or
(26:00):
health savings account.
But there is clear guidanceabout service animals therapy
animals, guide dogs, hearingdogs, mobility assistance dogs,
seizure response dogs all ofthese types of animals that are
specifically trained for amedical condition tax deductible
and some people go well, I'vegot to itemize, and then my AGI
(26:22):
comes into play and blah, blah.
That's why you use your HSA Putthe money in your HSA, let the
HSA pay for the service animal,and so that's another little
loophole or workaround.
That's pretty interesting.
Speaker 2 (26:35):
Yeah, and that makes sense.
I mean, those dogs, thoseanimals have costs to them and
that's part of your healthcarespending and for those of you
that have those, those medicalconditions where you need that
type of service, that totallymakes sense.
I love that little little tipthere.
So so let me just summarizehere.
Of course, the HSA.
We love it because you get atax deduction when you throw
your money in immediately onyour tax return.
You're saving money.
(26:55):
Now you can invest it in thingsyou know and believe in.
You can grow it.
It doesn't have to just sit ina savings account somewhere you
don't even know it's makingnothing, or invest in a stock or
mutual fund.
You can do invest in.
You can invest in cool thingsyou like.
It could be crypto, it could bea private fund, it could be
real estate, it could belivestock, even maybe even you
buy some livestock from KohlerBritt cattle company who knows?
And for more ideas on what youcan invest in besides stocks,
(27:19):
bonds and mutual funds, come toour AltAsset Summit.
By the way, that's October 16thand 17th, altassetsummitcom.
From all these different thingswe've talked about real estate,
multifamily oil and gas Maybewe'll even have Mark Kohler talk
about livestock.
President of Kohler Britt.
Speaker 1 (27:37):
Cattle Company.
Maybe we'll do a barbecue, alittle speech and some ribs
could be good.
Some little filet mignon steakskewers could be good.
Anyway, yeah, no, I get thisconference is so good.
I really recommend any of youthat are looking for greater
returns inside your retirementaccounts than just a 5% to 8%.
(28:00):
Maybe you get lucky with a 10%.
After all of the administrationfees, let's be real.
The beauty of self-directing isadministrative costs are
oftentimes far, far less becausethere's not an investment
manager over your money.
It's you directing.
Get the word Self-directingwhere that money goes and the
(28:20):
ROIs can be incredible.
So please come to that AltAsset Summit, either in person
or get the remote link.
It's every year.
It's just awesome.
Patty and I walk around and goto the different booths and it's
been amazing what some of thepeople are doing out there,
investing, making money that wedidn't know we could participate
in with just our retirementaccounts as a lay person, if you
(28:42):
will.
Speaker 2 (28:43):
Yeah, and then I'll be in Scottsdale, arizona
Beautiful time to be here middleof October.
Lots of other like-mindedinvestors and incredible experts
too, speaking, so we'd love tosee you guys there Then.
The last tidbit, of course, onjust this HSA topic is remember,
on getting the money out.
You can use it for qualifyingmedical.
We talked about a lot of thestuff that is qualifying but you
don't have to pull it out now.
(29:03):
Let the money ride right.
If you have good investmentsand opportunities, let it
compound and grow in that taxadvantage account.
Pull it out later when you doneed the money to actually live
on for your own lifestyle, ormaybe because you've sold your
business or you're not workinganymore, you're in retirement or
your financial situationchanges, whatever the case may
be.
But just know you don't have topull the money out immediately
(29:25):
when that medical expense isincurred.
Speaker 1 (29:32):
Yeah Well, I want to just say thank you to all of you
, our listeners, that hopefullyfind this a little entertaining
as well.
We try to bring uniqueperspective to these topics and
I want to say thanks to Matt,who's really been a leader in
this industry and helped so manypeople understand what they can
do with their retirementaccounts.
And Directed IRA, the trustcompany, the team there, is
(29:52):
amazing.
You can always get to thewebsite, click on the live chat,
give us a phone call.
Your employees right here inthe United States, right here in
Phoenix, you'll get on thephone and talk with and they're
just great people too.
So we would love to be of helpto you.
Please take control of yourdestiny and your future.
(30:14):
It's yours for the taking andyou can do it even with your
health savings account.
Thanks so much for everybodylistening and we're going to see
you next week for anotherepisode of the Directed IRA
Podcast.
And thank you everyone forlistening.
A quick disclaimer and reminderthis presentation does not
constitute an attorney or CPAclient relationship and it is
always in your best interest toconsult competent legal and tax
(30:38):
professionals when conductingyour own personal transactions.
Speaker 2 (30:41):
We also want to make sure you know this is not
investment advice or financialadvice.
We're just trying to give youeducation, ideas and strategies
you can take to yourprofessionals or conduct your
own research on.
We'll see you next time.
Welcome everybody to another episode of the Directed
IRA podcast.
My name is Mark Kohler aka fortoday's show, John Dutton, and
I'm here with Matt Sorensen, theamazing CEO of Directed IRA and
the author of the Directed IRAHandbook, and I'm just going to
leave it out there as a teaserwhy we're talking about John
Dutton and Yellowstone, becausethis topic is about HSAs and you
(00:31):
don't even know the hiddenbenefit yet.
It's going to blow your mind.
Speaker 2 (00:35):
Yeah, if you want to own cows in your HSA, maybe you
could do that.
I'm just saying maybe you coulddo that.
We'll get to that.
So we want to talk about thehealth savings account.
I know you might be like that'snot very exciting, guys.
This is an incredible taxstrategy.
It's a way to save on taxes.
We all have medical, butthere's also an incredible
investment strategy you'reprobably not aware about, which
(00:56):
is using an HSA to invest inassets you know and believe in.
So we're going to talk abouthow do I get money in an HSA?
Why does that help me on my taxreturn right now?
How do I invest it and grow it?
And we got some incredibleopportunities for you to think
about.
We're not just talking aboutputting in a savings account or
even buying a stock, mutual fundor ETF.
And then, third, we want totalk about getting money out of
(01:17):
that and accessing that, andmedical being one of the most
common expenses you're going tohave later on in retirement.
Speaker 1 (01:22):
We all have medical through our lives, so we're
going to talk about actuallyaccessing that and how we're
doing that in a tax advantagemanner as well, and I want to
give you guys another couple ofhooks on this.
The number one reason forbankruptcy in America medical
expenses.
The number one reason peoplepull money out of their
retirement account medicalexpenses.
(01:42):
Medical expenses are growingagain at an exorbitant rate.
We have the Maha movement.
We're hoping the RFK might beable to do something to bring
down the costs of healthcare,but we need to take control of
our healthcare costs by payingcash.
We don't have to rely on theinsurance companies.
(02:04):
We can control our own destinywith our HSA accounts.
There's so many hidden benefitshere.
Speaker 2 (02:09):
Here's what I want you to think about for the HSA.
I want to just lay it out therequick.
There's a triple tax benefit tothe HSA.
You get a tax deduction whenyou put the money in.
As you invest it and grow it,you pay no taxes.
It's growing, Every penny getsto be reinvested and continue to
grow.
And then there's no tax whenyou pull the money out for
qualifying medical.
You don't need to wait tillyou're later, at 59 and a half
that's at any age and so it'scalled sometimes the triple
(02:32):
threat triple tax benefit.
Speaker 1 (02:34):
HSA.
There's no other account likethis.
With the Roth you have to paytax, then put the money in.
Okay, I get twofer With an IRAor 401k, I get a deduction on
the way in, but then I got topay tax on the way out.
So I get another twofertax-free or should say
tax-deferred growth and thenI'll pay tax later.
(02:55):
But with the HSA you get allthree and then another bonus.
There's no AGI limitations.
There's no income limitations.
It does not phase out, it is onthe front page of your tax
return.
I guess I can't think of abetter tax deduction for any
American in this country that'son the front page of a tax
return than the HSA.
Speaker 2 (03:15):
Yeah.
So now let's hit some of theways you get the money in.
You can put 4,300 bucks in ayear this is 2025 if you're
single, $8,550 for those thatare married.
This is contribution in adeduction on the front page of
your tax return.
Like Mark says, you don't haveto itemize.
You get this deduction on thefront page of your return.
Whether you take the standarddeduction or itemize, you're
(03:35):
going to get that.
Now to qualify, you must have ahigh deductible plan, all right.
So if you have a gold plan, forexample, or if you have a
Cadillac plan a really nicehealth insurance plan you can't
do an HSA, sadly.
So you must have what's calleda high deductible plan.
Now, under the one bigbeautiful bill, one of the
(03:56):
changes was any bronze planqualifies now as a high
deductible plan and there aresome rules on that.
Most plans, when you have them,they will say HSA eligible.
Even here at our companies orour own employees, we have an
HSA eligible option and a healthplan.
Or you have that's usuallycheaper or you have a more cover
(04:17):
, everything lower deductibletype plan, which is typically
more expensive.
Speaker 1 (04:21):
Yeah, and another way of approaching this insurance
issue, if I may, is don't worryabout these metals bronze, gold,
platinum plan, whatever.
When you're shopping forinsurance, whether you're on the
state network, the federalnetwork or using an independent
insurance agent and we all threeare alive and well in the
(04:43):
country helping people gethealth insurance just make sure
it's a qualifying HSA plan.
That's all you want to ask.
Is this a qualifying HSA planFor those out there that like a
little extra info?
That deductible limit has to beat least $1,650 if you're
single or $3,300 if you'remarried.
Now, you may be like, if you'resingle, or $3,300 if you're
(05:07):
married, now you may be likeholy crap, I got to come out of
pocket for $3,300 with my healthinsurance plan in order to have
an HSEA.
Yes, now here's.
Here's the okay part.
Most people don't even use theirhealth insurance and so if
you're unhealthy, you're goingto go after a different type of
plan.
But I think statistics are now70% of people don't even tap
into the full deductible, evenwith a normal HMO type plan.
(05:30):
They buy health insurance forthe catastrophic problems.
Oh no, I broke a leg or I haveto have surgery or I got a
terrible disease or some ailment.
That's when insurance reallyshould be there for us and we
overdo it.
We're buying oftentimes healthinsurance we don't need.
So just get the right type ofplan and realize that you're
(05:52):
putting away money and savingsto cover the deductible and if
you don't use it, that money'sgrowing for you forever.
Speaker 2 (05:59):
Yeah, and those plans you'll still have, like office
visits for smaller amounts andthe co-pays, and so you're still
getting that coverage andbenefit there.
It's just for when you arecoming out of pocket you'd have
to hit those limits Again.
$1,650 single, $3,300 or somarried it's not that high of a
deductible actually so but thisis also, we've said,
particularly for those that arehealthy.
(06:20):
Hsa is an incredible optionno-transcript money into it
(06:51):
because it has such anincredible tax benefit.
As we said, it gives you thetriple threat is the only one
where you get the triple threatdeduction tax-free growth
tax-free distribution Yep.
Speaker 1 (07:01):
Now a couple of more thoughts on this first part of
just getting money in there.
Tax-free distribution Yep.
Now a couple of more thoughtson this first part of just
getting money in there, becausethere's a lot here and we've got
other podcasts on our sisterchannel, main Street Business
Podcast, where we dedicatealmost an hour to the HSA topic
every year, especially in thefall when it's that enrollment
period.
So you want to be choosing theright type of insurance during
that time period.
But a couple of other thoughts.
(07:22):
Once you turn age 65 and areeligible for Medicaid, you can't
open a new HSA.
You can keep investing the oneyou started previously, but you
can't open a new one or put newmoney in when you pass go every
year in January.
But whatever that bucket is,you can continue to invest it
and pull it out tax-freewhenever you want.
Another thought aboutcontributions is is I like what
(07:46):
Matt brought up?
Is the strategy?
The sequence for me is any ofyou at work that have a 401k
matching program, get the match.
I mean that's doubling yourmoney.
Now it's only going to be 2% or3% of your salary.
Don't shoot for the stars onwhat you could put in the 401k.
Just get the match Double yourmoney.
Then get out and sit back andgo.
Okay, where else do I want todeploy my savings?
(08:09):
The Roth IRA and the HSA thosetwo are going to be right up
there in the second or thirdposition.
Then we're going to startlooking at going back to the
401k, maybe putting in more,maybe we're going to look at a
rental property.
So, with a strategic approach,you're really building these
multiple buckets fordiversification, asset
(08:29):
protection, and this money isbuilding for the number one cost
that you're going to face inlife.
Speaker 2 (08:37):
Yeah, a couple other things.
If you're 55 or older, you getto put in an extra $1,000 a year
.
It used to be kind of clunkyhow you did this.
That was one thing in the onebig beautiful bill that was
fixed on this, where if you aremarried and have a family, hsa,
and both of you are over 55, youcan each put the extra $1,000
in.
Before you used to have to bothgo do single to do that, where
(08:59):
you can double up on the on thecatch up there for the extra
thousand.
Speaker 1 (09:03):
You can put the 2000 in now in a married plan if
you're both 55 or older.
Love it.
There you go.
Exactly One of the things.
Speaker 2 (09:09):
if one of you is only over it, then one of you can
just do the thousand.
If you're both over, you can.
You'll get the 2000 into thatmarried HSA.
Speaker 1 (09:18):
Yeah, I love.
Other thing on contributionsthat I think is important
everybody knows this is not aself-administered account.
You're not going to just goopen a bank account and say, oh,
that's my HSA.
This is the one where you haveto use a third-party type
administrator that's going tomanage this account for you.
There's companies out therethat'll give you a debit card
with it if you're going to putthe money in and pull it right
back out, which is fine.
(09:38):
But for those who can let themoney ride, we're going to come
to part two here, which isinvesting that money, letting it
go.
So you're going to open anaccount.
It does not have to be with theinsurance company.
It does not have to be withyour employer.
This is totally portable.
You can take this accountanywhere you go, as long as you
have the right type of insurance, you can throw the money in.
If your employer throws alittle in, great, you can put in
(09:59):
the rest up to those limitsMatt mentioned earlier.
Speaker 2 (10:07):
So, yeah, man, investing this is your favorite
part, yeah, this is the bestpart of it.
And I think so many people missthis step is they think, oh,
I've got this HSA and it's justsitting in a savings account at
some bank making nothing.
What are you doing?
You got to be engaged in this.
You can invest that money, youpay zero tax on the returns on
that and that comes out entirelytax-free to cover your medical
which, by the way, I'm going totell you, don't pay your medical
(10:28):
, reimburse it out later, andwe'll get to that in a second
here.
But as you're investing thatmoney, I want to be focused on
growing that, doubling it,tripling it, so you have a
bigger bucket, because we knowthis is going to be a big
expense as you hit retirement,like long-term care, medicare
coverage that you pay for out ofpocket, like you can use your
HSA for that stuff, of coursedental there's so many things
(10:48):
you're going to be able to coverfor this during your lifetime
that you can reimburse yourselfbackwards to even the stuff
that's occurred over yourlifetime as you've had an HSA.
So we want to get a big HSA atthe end of the day.
Now let me just cut to the chasehere.
My HSA owns crypto.
Now you're like wait, you can,I own Solana in my HSA.
You can own Bitcoin or Solana,you can, actually as an
(11:10):
investment asset.
Yeah, okay, now we have acrypto HSA directed IRA, which
is what we do here at ourcompany.
Directed IRA.
You can own real estate andother cool things with your
health savings account.
So we're not just talking aboutinvesting in a stock you could
or a mutual fund you could.
(11:31):
We're talking about investingin things that you believe in
and think can grow exponentiallyto grow that HSA.
Speaker 1 (11:34):
Yeah, I was so excited to talk about this today
because I and I mentioned JohnDutton for fun in my
introduction.
But my wife and I recentlybought a ranch.
I call it a ranch.
It's a piece of land.
Right now You've got to startdoing stuff on it to actually
call it a ranch, but we'retrying.
It's land with a trailer.
We bought a ranch and in thislittle valley we've gotten to
(11:57):
know other ranchers and farmers,of course, gotten to know other
ranchers and farmers.
Of course you go down and hangout at the grill or the little
cafe on Saturday mornings, Matt.
Speaker 2 (12:10):
That's the trick.
Just want to give you a littlepro tip there.
That's where you get what'sreally going on in town.
Speaker 1 (12:14):
Yeah, we hit the county fair, the junior
livestock auction, all thosegoodies.
But anyway, I asked thisrancher down the street.
I said, hey, can I buy a fewcows in your herd?
Now, this was last fall, rightbefore the presidential election
and the Maha movement with RFKwas starting to gain more
(12:34):
traction, grass-fed beef,hormone-free beef and a little
more health-conscious beefconsumption around the country,
whatever.
But he said, sure, it'll be onhis land, he'll manage them
amongst his other herd.
And he's like how many cows doyou want?
And I go, how much are they?
He's like well, you can buy apair that's a mom and a heifer,
(12:59):
I'm sorry, a heifer and a calf,it's called a pair for about
$3,500.
And he told me how much hewould charge to take care of
them on the range.
And then in the fall and wepenciled it out and Patty and I
combined our HSAs, created alittle LLC and we have been
(13:20):
contributing to our HSA the lastfour or five years.
So we have 30 or 40 grand inthere and we bought nine, 10
pair and so we have 20 plus cowsthat we, when we drive through
the valley, we can look over andgo hey, those are our HSA cows
and hormone free grass fed, andwe could already sell those
(13:41):
pairs for about 4,500 to 5 grandright now, just six months
later.
Now we're going to go throughthe fall.
They're going to fatten up toabout 1,200 pounds each those
calves, and we're selling thelivestock auction in the spring.
But we're going to have a 20,30, 35% return on these cows
inside our health savingsaccount.
How ironic is that Maha meatinside a health savings account?
(14:03):
We just think it's so fun.
And that's just an example ofgetting creative.
You could do notes, you can doloans, you can invest in a small
business down the street in aneighborhood that you're excited
about, a business.
Let your HSA participate inthat, and all that profit is tax
free.
Yeah.
Speaker 2 (14:20):
And your HSA is also on the rental property.
Speaker 1 (14:23):
Yeah, that's right I've got.
10 years ago I bought a littlemeth lab with my HSA.
There's the irony there, butanyway, it's adorable for the
low-income housing deal out inChicago area but it's still
rolling.
Speaker 2 (14:37):
Those are non-prescription drugs.
Doctor's not necessarilywriting a prescription on those.
I might clarify on the HSA here, but I think what we're talking
about here is self-directing.
If you're new to this show,we're talking about your IRA,
your HSA, your tax advantageaccounts.
When you go and invest them,you don't just have to buy a
(14:58):
stock or a mutual fund or an ETF.
That's not the only investmentoption.
That is when you have abrokerage HSA or IRA.
But if you have a self directedHSA, which you can open a new
one, put new money in.
You can transfer it fromfidelity or health equity or
wherever your HSA accounts at.
You can transfer that existingmoney your employer's health
savings account.
You can always move that, thatmoney that's just sitting there,
(15:19):
probably in a savings accountor some mutual fund you don't
even know what it is.
You can transfer that todirected IRA and invest it in
crypto, invest it in you knowlivestock real estate, whatever
it is you're interested in.
These assets are available toyou using a health savings
account and the goal here, ofcourse, is we're going to grow
the HSA, those returns on thecrypto.
(15:40):
That goes back into my HSA.
It grows it, the return on thelivestock when Mark sells the
cows.
That's putting return andinvestment gains back into the
HSA.
The rental income on theproperty on his HSA, the gain
when he sells it, that'sbuilding up the HSA account
balance.
No tax, there's no tax on that.
You're going to keep everypenny back in that HSA.
(16:00):
It's growing that balance, soyou're having that those funds
available for your futuremedical.
Now of course, we'll talk aboutusing the money here in a
second.
You can draw it out now if youwant to.
But why not keep investing incompounding in that tax
advantage account?
Draw the money out later unlessyou really really need it.
Yeah.
Speaker 1 (16:17):
Before we hit this third phase.
If it's all right, I'm going togive a shameless plug.
If you go toKohlerBritCattlecom that's
K-O-H-L-E-R, kohlerbrit,b-r-i-t-t, cattlecom you can
pre-buy for a nominal fee theright to buy one of these 10
(16:39):
grass-fed, hormone-free calvesin the spring, and we've already
got a handwritten waiting list.
But we launched the websitethis week.
Actually, it's funny, matt.
Matt was the one that wanted totalk about HSAs and I'm like, oh
my gosh, I can talk aboutcolibrick cattle, but it's hard
to find cattle to buy that youwant to have processed and
butchered and split amongstfamily or friends or neighbors,
(17:00):
because these are like 600, 700pounds of beef when you process
a cow that big.
So if you're interested in thatand you want to watch our live
roundup in 10 days, we're goingto be doing it with webcams and
you can watch and see us movethe herd about a mile and do
(17:20):
some branding, and so if youwant to watch us on the live
webcam and see the roundup, youcan get to the Kohler Brick
Cattle Company website.
It's going to be a lot of fun.
So we'll have a link down thereon the page too.
But I'm so excited to build thevalue of the HSA so that I can
pull it out when I want to, notwhen I have to.
(17:41):
And this is an exciting thingbecause, matt, I love how you've
talked about this and I kind oflearned this from you is that I
don't have to go have a debitcard to go to the doctor.
I can just keep track of mymedical expenses and then
reimburse myself later and gosh,I think that rule you can
collect those receipts for years.
Speaker 2 (18:02):
Yeah, I mean, that's the nice thing about the HSA is
like, as long as you've had theHSA, you don't have to pull the
money out.
Now, let's say you have medicalin 2025.
You have 5,000 of medical andyou're like, well, I could pull
that out of my HSA and coverthat.
Why would you do that?
Why would you take money out ofa tax advantage account?
When you invest it and grow itand you pay no tax to go cover a
(18:24):
medical bill, you already gotthe deduction.
When you put the money in,you're not paying taxes.
You're growing it.
Spending it out of the HSA isthe last thing you want to do,
because just pay for it moneyout of another pocket of money.
Pay for it out of your regularchecking your savings account.
Don't pull the tax advantagefunds out Now.
Money out of your regularchecking your savings account.
Don't pull the tax advantagefunds out Now.
(18:44):
You might be like well then, howam I ever going to get the
money out of the HSA?
Take it later, let that moneycompound and grow in a tax
advantage way where every pennyof gains and investment returns
you have, you get to reinvestwith no tax.
But the rule for HSA is, let'ssay, 10 years later.
You're like well, now I want todraw up some money out of this
thing.
I'm in retirement or myincome's down now, and I want to
start drawing on this HSA.
(19:05):
And now it's in 2035.
Well, can I only take outmedical that I have in 2035?
No, all the medical you had inthe last 10 years.
You just track it.
You can pull it out 10 yearslater, in 2035.
That 5,000 in 2025 you had that.
You decided to let stayinvesting, and now that 5,000
(19:26):
represents 20 or 30 grand fromall the investment returns and
gains.
Pull that five grand out laterin 2035.
And so it's about being alittle more strategic about it.
A lot of our clients who aretax savvy take that approach
where they're like why on earthwould I drain money out of this
tax advantage account to covermedical?
I got the tax deduction alreadywhen I put it in.
Speaker 1 (19:49):
I love your example, but I will say why in the world
would you do it?
There are a few listeners whodon't have another pocket full
of five grand.
Obviously, obviously Somepeople are like, I need it.
Speaker 2 (20:01):
The other pocket and I've done that and I think
that's kind of the even my ownHSA.
You know, when I was in my late20s and 30s and I had an HSA, I
only put money in to take itright back out.
Right, I had a $2,000 medicalbill or something like that, or
my kids needed braces.
I put the exact amount into myHSA and I took it right back out
(20:24):
because I need the deduction.
That's the way you have to doit.
You got to launder the moneythat way if you want the
deduction.
But that was coming right backout.
But then my mindset shiftedbecause I'm like I don't need to
draw it out.
I can start saving andinvesting my money.
Yeah, would I do that?
in a brokerage account no, usethe HSA no tax.
Speaker 1 (20:42):
Yeah, so, so powerful .
Now let's answer what can youtake it out for?
Now this has actually gottenbroadened with recent
legislation, but let's juststart with the baseline IRS
publication 502.
You can Google it, put it onyour desktop on your laptop.
You can Google it, put it onyour desktop on your laptop,
(21:02):
print it out.
It's kind of thick but it's gota great index and it goes
through every possible medicalexpense Dental, eyes, physical
therapy, chiropractic,prescription drugs and
everything that could or willnot be allowed to be reimbursed.
But the list is much, muchbroader than you may think.
(21:25):
I had some clients that had anautistic child and they were
doing special education, therapyfor speech therapy and all
sorts of things all coveredunder the HSA or deductible
under an HRA, a 105 plan, awhole other concept because they
were a small business owner,because they had even more
(21:49):
expenses than their HSA couldcover.
But what you can pull out foris just a laundry list and in
2020, with the CARES Act, itallows now over-the-counter
drugs and even teletherapy andall sorts of non-prescription
expenses that you can getreimbursed through your HSA.
So that's really exciting,because I would just make this
(22:09):
recommendation, as Mattreferenced have a spreadsheet
somewhere or a file or a folderof your paper mindset or
paperless mindset, whichever oneit is.
Have somewhere where, at theend of the year, you get a
report from all the doctors orpharmacies you may have visited.
Maybe estimate what you spentat Walmart or Target on
(22:30):
over-the-counter drugs aspirin,advil, tylenol, whatever Kind of
do a little schedule.
Here's what I spent in 2025.
Speaker 2 (22:39):
Just put it somewhere Done and that's like a tax-free
ledger that someday in thefuture you can just go grab it
and done so yeah, and I thinkeven with us at directed IRA,
you know we're not saying youhave to use the debit card to
spend it out, so many people areused to that.
No submitted expense submittedsubmitted distribution request.
(22:59):
Tell us that it was forqualifying medical expenses and
we send you the money.
We report it as a you know thatit was a distribution to you to
reimburse you for qualifyingmedical, not taxable.
Now, one big thing that happenedin the one big beautiful bill
that was a buzzkill was theystripped out of early provision
(23:19):
that said gym memberships wouldbe able to be an expense in your
HSA and that was going toqualify as a medical expense.
Sadly, in the final bill thatwas snuck out.
I thought it was a lame movebut because that would have been
cool, you could have coveredyour HSA, could have paid for
your gym membership, which makessense.
We need to get people, you know, focused on that and a healthy
(23:40):
lifestyle.
But that was pulled out.
So if you see any in there thecommentary on that, even my own
videos or any of the stuff likethat just know that the
qualifying medical expense for agym did not make it into the
final one big beautiful bill.
Speaker 1 (23:54):
Yeah, now there is some strategic planning here,
kind of gray area planning.
I don't want to say gray, justinterpretive planning.
Let me reference a couple otherpublications you'd want to
consider Publication 969.
The IRS website has so manyresources on this Code, section
(24:15):
213D, which is going to allowfor long-term care coverage
insurance.
Your HSA can start paying forlong-term care expenses or
insurance and there's a lot ofcase law out there that the
courts have said the tax courthas said if a doctor prescribes
a certain therapy, like you needto go swim every day for
(24:38):
physical therapy.
There's cases and we've hadclients that have put in a
swimming pool, one of theseMichael Phelps-type lap pools
for physical therapy and theirHSA has paid for it or they've
deducted it as a medical expense.
So that's something you need towork with your accountant on
and make sure you understand therules and having a bona fide
(25:00):
prescribed method ofrehabilitation or therapy.
And it can be deductible underthis as well.
Speaker 2 (25:07):
Absolutely yeah, they call it letter of medical
necessity.
So if your doctor, physician,healthcare provider gives you a
letter of medical necessitysaying this is medically
necessary for you for physicaltherapy, you could have.
A gym membership is definitelysomething that you would be
eligible for because of sometype of illness or disease or I
(25:29):
don't know.
It could be a weight issue.
Even that could be causing somemedical problems.
So you can doctor then, butit's not an automatic gym
membership qualifies right now.
Speaker 1 (25:40):
Now what I love about this, matt, too.
I just want to add anotherinterpretive issue, and that is
service animals.
The CARES Act did notspecifically address emotional
support animals as allowablemedical expenses that can be
reimbursed for through aflexible spending account or
(26:00):
health savings account.
But there is clear guidanceabout service animals therapy
animals, guide dogs, hearingdogs, mobility assistance dogs,
seizure response dogs all ofthese types of animals that are
specifically trained for amedical condition tax deductible
and some people go well, I'vegot to itemize, and then my AGI
(26:22):
comes into play and blah, blah.
That's why you use your HSA Putthe money in your HSA, let the
HSA pay for the service animal,and so that's another little
loophole or workaround.
That's pretty interesting.
Speaker 2 (26:35):
Yeah, and that makes sense.
I mean, those dogs, thoseanimals have costs to them and
that's part of your healthcarespending and for those of you
that have those, those medicalconditions where you need that
type of service, that totallymakes sense.
I love that little little tipthere.
So so let me just summarizehere.
Of course, the HSA.
We love it because you get atax deduction when you throw
your money in immediately onyour tax return.
You're saving money.
(26:55):
Now you can invest it in thingsyou know and believe in.
You can grow it.
It doesn't have to just sit ina savings account somewhere you
don't even know it's makingnothing, or invest in a stock or
mutual fund.
You can do invest in.
You can invest in cool thingsyou like.
It could be crypto, it could bea private fund, it could be
real estate, it could belivestock, even maybe even you
buy some livestock from KohlerBritt cattle company who knows?
And for more ideas on what youcan invest in besides stocks,
(27:19):
bonds and mutual funds, come toour AltAsset Summit.
By the way, that's October 16thand 17th, altassetsummitcom.
From all these different thingswe've talked about real estate,
multifamily oil and gas Maybewe'll even have Mark Kohler talk
about livestock.
President of Kohler Britt.
Speaker 1 (27:37):
Cattle Company.
Maybe we'll do a barbecue, alittle speech and some ribs
could be good.
Some little filet mignon steakskewers could be good.
Anyway, yeah, no, I get thisconference is so good.
I really recommend any of youthat are looking for greater
returns inside your retirementaccounts than just a 5% to 8%.
(28:00):
Maybe you get lucky with a 10%.
After all of the administrationfees, let's be real.
The beauty of self-directing isadministrative costs are
oftentimes far, far less becausethere's not an investment
manager over your money.
It's you directing.
Get the word Self-directingwhere that money goes and the
(28:20):
ROIs can be incredible.
So please come to that AltAsset Summit, either in person
or get the remote link.
It's every year.
It's just awesome.
Patty and I walk around and goto the different booths and it's
been amazing what some of thepeople are doing out there,
investing, making money that wedidn't know we could participate
in with just our retirementaccounts as a lay person, if you
(28:42):
will.
Speaker 2 (28:43):
Yeah, and then I'll be in Scottsdale, arizona
Beautiful time to be here middleof October.
Lots of other like-mindedinvestors and incredible experts
too, speaking, so we'd love tosee you guys there Then.
The last tidbit, of course, onjust this HSA topic is remember,
on getting the money out.
You can use it for qualifyingmedical.
We talked about a lot of thestuff that is qualifying but you
don't have to pull it out now.
(29:03):
Let the money ride right.
If you have good investmentsand opportunities, let it
compound and grow in that taxadvantage account.
Pull it out later when you doneed the money to actually live
on for your own lifestyle, ormaybe because you've sold your
business or you're not workinganymore, you're in retirement or
your financial situationchanges, whatever the case may
be.
But just know you don't have topull the money out immediately
(29:25):
when that medical expense isincurred.
Speaker 1 (29:32):
Yeah Well, I want to just say thank you to all of you
, our listeners, that hopefullyfind this a little entertaining
as well.
We try to bring uniqueperspective to these topics and
I want to say thanks to Matt,who's really been a leader in
this industry and helped so manypeople understand what they can
do with their retirementaccounts.
And Directed IRA, the trustcompany, the team there, is
(29:52):
amazing.
You can always get to thewebsite, click on the live chat,
give us a phone call.
Your employees right here inthe United States, right here in
Phoenix, you'll get on thephone and talk with and they're
just great people too.
So we would love to be of helpto you.
Please take control of yourdestiny and your future.
(30:14):
It's yours for the taking andyou can do it even with your
health savings account.
Thanks so much for everybodylistening and we're going to see
you next week for anotherepisode of the Directed IRA
Podcast.
And thank you everyone forlistening.
A quick disclaimer and reminderthis presentation does not
constitute an attorney or CPAclient relationship and it is
always in your best interest toconsult competent legal and tax
(30:38):
professionals when conductingyour own personal transactions.
Speaker 2 (30:41):
We also want to make sure you know this is not
investment advice or financialadvice.
We're just trying to give youeducation, ideas and strategies
you can take to yourprofessionals or conduct your
own research on.
We'll see you next time.
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