Investing in an HSA
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Investing in an HSA
I have $5500 in an HSA at my local bank and it earns 0.05% interest. I want to transfer the funds to an HSA that I can use for tax-advantaged investing. I want an HSA custodian that has no fees (minimum account levels are fine) and has a fund with a low expense ratio that fits into the 3-Fund Portfolio. I don't need many investment options, because I can balance my other retirement funds accordingly.
Two questions:
1) What HSAs do you recommend for investing? (I have already looked over this list here http://www.bogleheads.org/wiki/Health_savings_account).
2) Before I can initiate a transfer, many HSAs require that I first open an account with them and deposit $100 into the account. I have already maxed out this year's contribution. Will that $100 count as a contribution and put me over my limit.
Regards,
--BB
Two questions:
1) What HSAs do you recommend for investing? (I have already looked over this list here http://www.bogleheads.org/wiki/Health_savings_account).
2) Before I can initiate a transfer, many HSAs require that I first open an account with them and deposit $100 into the account. I have already maxed out this year's contribution. Will that $100 count as a contribution and put me over my limit.
Regards,
--BB
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- Joined: Tue Jul 24, 2012 4:57 pm
Re: Investing in an HSA
Regarding your first question, we have our HSA at Bancorp Bank, and have been very happy with it -- low fees, Streetscape Brokerage, etc. Many funds available with very low fees. Worth considering.
Not sure how to deal with the issue raised with your second question....
Not sure how to deal with the issue raised with your second question....
Re: Investing in an HSA
I use HSABank. The minimum for no-fees is $4925 in the savings account, but keeping $5000 there gets you 0.25% interest. Thus amounts above $5000 can be invested via TDAmeritrade with no fees if you use their no-commission ETFs.
2. Yes, I think that $100 will put you over with the severe penalties for doing so.
2. Yes, I think that $100 will put you over with the severe penalties for doing so.
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Re: Investing in an HSA
They both look like better options than my current HSA. Thank you for the recommendations.
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Re: Investing in an HSA
I'm surprised no one has mentioned this place:
http://www.hsaadministrators.info/vanguard-funds-list
It seems to be the HSA company that is most closely aligned with Vanguard. I don't have an account but was planning on getting one on Jan 1 when my plan changes.
http://www.hsaadministrators.info/vanguard-funds-list
It seems to be the HSA company that is most closely aligned with Vanguard. I don't have an account but was planning on getting one on Jan 1 when my plan changes.
Re: Investing in an HSA
I think you will be OK. Open the account with the $100, then transfer the money from the other account. Then, withdraw the $100 as an excess contribution. If you do so before the end of the year (or before next April 15) there should not be an issue besides a little complication in your tax return.BadgerBrewer wrote:I have $5500 in an HSA at my local bank and it earns 0.05% interest. I want to transfer the funds to an HSA that I can use for tax-advantaged investing. I want an HSA custodian that has no fees (minimum account levels are fine) and has a fund with a low expense ratio that fits into the 3-Fund Portfolio. I don't need many investment options, because I can balance my other retirement funds accordingly.
Two questions:
1) What HSAs do you recommend for investing? (I have already looked over this list here http://www.bogleheads.org/wiki/Health_savings_account).
2) Before I can initiate a transfer, many HSAs require that I first open an account with them and deposit $100 into the account. I have already maxed out this year's contribution. Will that $100 count as a contribution and put me over my limit.
Regards,
--BB
L.
You can get what you want, or you can just get old. (Billy Joel, "Vienna")
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- Joined: Tue Jun 26, 2012 6:55 pm
Re: Investing in an HSA
My concern with HSA administrators is that they charge an annual fee of $45.mich_bogle wrote:I'm surprised no one has mentioned this place:
http://www.hsaadministrators.info/vanguard-funds-list
It seems to be the HSA company that is most closely aligned with Vanguard. I don't have an account but was planning on getting one on Jan 1 when my plan changes.
Re: Investing in an HSA
$5000 @ 0.25% interest = $12.50BadgerBrewer wrote:My concern with HSA administrators is that they charge an annual fee of $45.
$5000 invested in stocks/bonds with expected return of 5% = $250
So to avoid the $45 annual fee, you are likely taking a net loss of $237.50. (Same trick with HSABank -- $5.50/mo in fees is still better than losing out on $250/yr in returns.)
The uglier part of HSA Administrators' fee schedule is the asset charge. At .0008 per quarter, that comes out to $108 at the $20K fee cap per fund.
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Re: Investing in an HSA
OptumBank. Charge $3/mo maint fee. Wish I could find a way around that fee. The Vanguard options made available (at least to me) are: VHGEX, VFINX and VWELX
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Re: Investing in an HSA
Wells Fargo also has an HSA. $2000 minimum in cash, $5000 total account level waives any fees, and they have WFIOX which tracks the S&P 500 and has a 0.25 expense ratio.
Re: Investing in an HSA
Exactly. I have put my HSA in WF in the same fund WFIOXBadgerBrewer wrote:Wells Fargo also has an HSA. $2000 minimum in cash, $5000 total account level waives any fees, and they have WFIOX which tracks the S&P 500 and has a 0.25 expense ratio.
Thanks, |
FB