HSA $ to fund backdoor Roth?

[FutureInternist]

I have some $ saved up in my HSA that I have not used as of yet, BUT I did have medical expenses AFTER I started the fund (which I paid out of pocket) - I read that if you incur expenses before starting the fund, then you cannot reimburse yourself.
My understanding is that there is no rule that stipulates a time frame as to when a medical expense is incurred vs when you can reimburse yourself.
Additionally, my understanding is that the HSA $ at death is treated as a regular inheritance for any children (taxes taken out) vs a Roth IRA (it's a backdoor Roth) can be given tax-free & allowed to grow for the kid's lifetime as well. (since we are planning only to use 403B & 457 for ourselves)

If above two are correct, then it seems it would make sense to drain the HSA now to fund Roth IRA for myself & wife ($12,000 total) and get a jump start on kids inheritance.

Thoughts?

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[Mman]

HSA contributions can only be used for healthcare expenses. Rolling it into a Roth would trigger income tax plus a penalty. Besides, at some point in your life you will have copays and things that will add up and you can just pay them from the HSA money.

 

[FutureInternist]

HSA contributions can only be used for healthcare expenses. Rolling it into a Roth would trigger income tax plus a penalty. Besides, at some point in your life you will have copays and things that will add up and you can just pay them from the HSA money.

Agree that HSA can only be used for medical expenses, but if I paid out of pocket already, I thought I could reimburse myself and then put that $ into Roth IRA.

 

[TMP-SMX]

HSA is better than Roth IRA for retirement but yes not great as an inheritance. Wait until 65 to use the HSA money (those medical expenses now hold on to the receipts and allow your HSA money to grow over time). This is not an either Roth IRA or HSA question you should be doing both as well as 403b and possibly 457 depending on your employer.

 

[Stroganoff]

Agree that HSA can only be used for medical expenses, but if I paid out of pocket already, I thought I could reimburse myself and then put that $ into Roth IRA.

I'd try to max out the $12,000 Roth IRA contributions without having to drain the HSA funds. Just try to do it from income.