NerdWallet's Smart Money Podcast
Are We in a Recession? What the Data Says—and How to Protect Your Finances
Thu, 08 May 2025
Learn what a shrinking GDP means for you. Plus: how to handle your HSA if your employer stops contributing. Is the U.S. in a recession? How do you roll over an HSA when your employer stops contributing? Hosts Sean Pyles and Elizabeth Ayoola discuss the current state of the economy and how to manage your Health Savings Account (HSA) to help you protect your finances. Joined by NerdWallet news writer Anna Helhoski and economist Elizabeth Renter, they begin with a discussion of economic indicators, offering insights into why the GDP shrank in Q1, how tariffs and inflation are affecting consumer behavior, and what signs might point to a looming recession. Then, NerdWallet health insurance expert Kate Ashford joins Sean and Elizabeth to discuss HSA rollovers. They discuss when it makes sense to move your HSA to a new provider, the tax implications of selling HSA investments, and how to avoid penalties during a rollover. Whether you’re consolidating accounts or reevaluating where to keep your medical savings, this segment breaks down your options and highlights key deadlines and common pitfalls to watch out for. Learn more about how (and why) to invest with your HSA: https://www.nerdwallet.com/article/investing/how-to-invest-hsa In their conversation, the Nerds discuss: recession 2025, are we in a recession, GDP contraction, health savings account rollover, HSA rollover rules, economic indicators 2025, consumer sentiment index, inflation 2025, core PCE inflation, high deductible health plan, HSA transfer process, in-kind HSA transfer, trustee-to-trustee HSA rollover, capital gains taxes HSA, how to avoid HSA penalties, HSA 60 day rule, HSA rollover timeline, federal tariffs and economy, HSA investment options, HSA fees comparison, emergency fund strategy, when to move an HSA, economic impact of tariffs, HSA cash vs investment transfer, consumer confidence 2025, saving during economic uncertainty, signs of recession, HSA matching contributions ended, managing money in downturn, and investing HSA funds. To send the Nerds your money questions, call or text the Nerd hotline at 901-730-6373 or email [email protected]. Like what you hear? Please leave us a review and tell a friend.
Chapter 1: Are We in a Recession? What Do the Latest GDP Numbers Indicate?
Chapter 2: How Can I Manage My Health Savings Account (HSA)?
And with all of the data and information I have available to me today, I would say no, we are not in a recession, and I am not alone in that statement. But for many of the reasons we've discussed today, there is a definite risk of one on the horizon, and that risk increases the longer this trade war continues.
All right. Elizabeth, is there anything specific that you're keeping an eye on in the coming months? Anything you're watching that others might be overlooking?
Well, I really wish I had more eyes for all of the things I'm trying to keep an eye on. But really, I think we've discussed many of the primary indicators that I watch on a regular basis to get a read on the overall health of the economy. One thing that we haven't touched on that I keep my eye on is consumer debt.
And this is less of a predictive recession indicator and more of a way to look at how a recession might impact households. So we know debt levels are higher now than they were just a few years ago. And higher debt obligations mean less wiggle room in the budget to absorb financial and economic stressors. So that's concerning to think about in the context of a potential recession.
And when you begin to see higher rates of debt delinquencies, you know households are really struggling. One of my many concerns right now is that should we find ourselves in a situation where a growing number of households are in financial dire straits, are there resources to help them?
And with federal grants being cut for community services, like food pantries, for instance, I'm not sure the answer is yes.
And finally, any advice for people on how to navigate all the uncertainty right now?
It might sound a little bit cliche, but people should really focus on what's within their control, namely their saving and their spending. I think most of us, myself included, have varying levels of anxiety about the future of the economy and our place within it. But there's really only so much we as individuals can do in this moment.
So the primary thing I would recommend is to revisit your emergency fund. And I know that's something you guys talk about a lot on the podcast. But having easily accessible emergency savings can be useful whether you have an unexpected expense like a medical bill or something as serious as a job loss. You know, ideally, you have several months of living expenses saved up.
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Chapter 3: What Economic Indicators Should I Be Aware Of?
Vicki mentioned selling stock before doing the rollover. Now, Kate, why might they have to do that?
Of the three ways that I just mentioned to rollover an HSA, the first two are cash only. So if you do a trustee to trustee transfer or the kind of transfer where your money gets sent to you and you deposit it, those have to happen in cash. So you would have to liquidate investments before transferring. And so it sounds like that's what Vicki is doing here.
There's the potential to do that third in-kind transfer where you can transfer investments directly, but not all HSA companies offer this, so it's not as common to do it that way. If you do have investments, you can ask your provider whether this is an option.
What are the tax implications of doing this? I know depending on where they live, they might owe state taxes on capital gains.
You are correct. Selling investments can certainly have tax implications depending on where you live because some states tax your capital gains. So this applies if there's been any growth on any of the contributions to your account. Capital gains treatment is state-specific, so Vicki will need to check on the laws in their state to see how that would be handled.
And to clarify, you're only going to owe capital gains taxes if you roll over your HSA. If you leave the account alone, those gains are tax-free.
What opportunities, if any, would Vicki have to reduce tax liabilities on this?
Well, Sean, the good news is that HSA rollovers are tax-free unless you're dealing with capital gains taxes, and that's going to depend on your state. So if you have investments and there's the option to do an in-kind transfer, that would be the best way to avoid taxes on the rollover.
So the last part of Vicky's question relates to the time it will take to do a rollover and potential penalties if Vicky doesn't rollover the funds to a new provider fast enough. Can you talk us through the rules around HSA rollovers and the timelines involved? How long people have to deposit funds with a new provider?
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Chapter 5: What Should I Do If My Employer Stops Contributing to My HSA?
And with all of the data and information I have available to me today, I would say no, we are not in a recession, and I am not alone in that statement. But for many of the reasons we've discussed today, there is a definite risk of one on the horizon, and that risk increases the longer this trade war continues.
All right. Elizabeth, is there anything specific that you're keeping an eye on in the coming months? Anything you're watching that others might be overlooking?
Well, I really wish I had more eyes for all of the things I'm trying to keep an eye on. But really, I think we've discussed many of the primary indicators that I watch on a regular basis to get a read on the overall health of the economy. One thing that we haven't touched on that I keep my eye on is consumer debt.
And this is less of a predictive recession indicator and more of a way to look at how a recession might impact households. So we know debt levels are higher now than they were just a few years ago. And higher debt obligations mean less wiggle room in the budget to absorb financial and economic stressors. So that's concerning to think about in the context of a potential recession.
And when you begin to see higher rates of debt delinquencies, you know households are really struggling. One of my many concerns right now is that should we find ourselves in a situation where a growing number of households are in financial dire straits, are there resources to help them?
And with federal grants being cut for community services, like food pantries, for instance, I'm not sure the answer is yes.
And finally, any advice for people on how to navigate all the uncertainty right now?
It might sound a little bit cliche, but people should really focus on what's within their control, namely their saving and their spending. I think most of us, myself included, have varying levels of anxiety about the future of the economy and our place within it. But there's really only so much we as individuals can do in this moment.
So the primary thing I would recommend is to revisit your emergency fund. And I know that's something you guys talk about a lot on the podcast. But having easily accessible emergency savings can be useful whether you have an unexpected expense like a medical bill or something as serious as a job loss. You know, ideally, you have several months of living expenses saved up.
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