HealthEquity HSA - Short Term Investment Options

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calendario
Posts: 7
Joined: Wed Apr 27, 2016 5:04 pm

HealthEquity HSA - Short Term Investment Options

Post by calendario » Wed Mar 15, 2017 12:45 pm

I have a new HSA with HealthEquity which will max out at the family cap of $6,750 by year end. The HSA is treated as additional tax-advantaged retirement savings within our overall asset allocation. The plan is to roll all but $25 out of HealthEquity and into Saturna for long-term investing once the account is fully funded, repeating annually.

I am looking for thoughts on what to do with the cash within the HealthEquity account as it builds throughout the year. The balance is currently earning approx. 0.2% interest. Alternatively, I may move any balance over $1,000 into the investment portfolio. While HealthEquity offers an array of Vanguard's low cost funds, they tack on an additional 0.4% wrap fee. I would likely invest in Vanguard Total International Stock Index Fund Institutional Plus Shares (VTPSX) at a 0.07% ER, plus the wrap.

I'm on the fence between leaving the balance in cash and waiting to invest until in Saturna or moving the balance into an investment(s) that fits my asset allocation now. Is it worth taking the 0.4% hit in the short term?

calendario
Posts: 7
Joined: Wed Apr 27, 2016 5:04 pm

Re: HealthEquity HSA - Short Term Investment Options

Post by calendario » Wed Mar 15, 2017 7:06 pm

bump.

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cookymonster
Posts: 195
Joined: Wed Nov 05, 2014 12:22 pm

Re: HealthEquity HSA - Short Term Investment Options

Post by cookymonster » Wed Mar 15, 2017 11:40 pm

Might as well get the money working for you now. Just put it in whatever option best fits your asset allocation. The wrap fee is aggravating, but the 0.4% is what is charged annually. Obviously in an average year you're going to make a better return than that in equities. Once you're done with the year's contributions, see if Saturna will transfer in kind, or go back to cash.

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