Investing in HSA Help

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BeautifulDisaster
Posts: 9
Joined: Thu Jan 11, 2018 12:56 pm

Investing in HSA Help

Post by BeautifulDisaster » Fri Jan 12, 2018 5:22 pm

Hello Group! Hoping to pick your brains on the below! Thanks in advance!

Age: 27
Debt: None
HSA: $2225.31 (w/ $1,000 reserve)
Fees: $2.90 per month to use investment platform
Individual Mutual Funds: No Fee
Managed Advisory Allocations: Charged Advisory Fee
12b-1 Fee

Available Mutual Funds Available:

•American Century Aggressive Alloc (AAAIX)
•American Century Heritage (ATHIX)
•American The New Economy Fund CL F2 (NEFFX)
•Calvert Short Duration (CDSIX)
•Fidelity Institutional Money Market Funds Govt. Portfolio (FRGXX)
•Fidelity Advisor Small Cap CL (FSCIX)
•Mutual Series Global Discovery Class Z (MDISX)
•Templeton Global Bond and Advisor Class (TGBAX)
•Gabelli Asset Fun (GABIX)
•Goldman Sachs Short Duration Govt Instl (GSTGX)
•Hotchks and Wiley Value OPP Class I (HWAIX)
•IVY Asset Strategy Fund CL I (IVAEX)
•Ivy High Income Class I (IVHIX)
•MFS Aggressive Growth Allocation (MIAGX)
•MFS Conservative Allocation CL I (MACIX)
•MFG International Value FD CL I (MINIX)
•MFS Moderate Allocation (MMAIX)
•Oppenheimer Developing Markets (ODVIX)
•PIMCO Investment Grade Corp BD (PIGIX)
•PIMCO Sotcksplus Intl (PISIX)
•PIMCO Stocksplus Small Fun (PSCSX)
•T Rowe Price Real Estate Fund ADV (TIRGX)
•Vanguard Mid Cap Index Admiral Shs (VIMAX)
•Vanguard Small-cap index Admirl (VSMAX)
•Vanguard Total Stock Market Instl (VITSX)
•Vanguard Total Bond Market Index Admiral (VBTLX)


Goal: Comfortable retirement (I already max out my 401k and Roth and am working on investing in an Index fund) and making my dollars work for me.

Questions:
1.What fund(s) should I put my HSA money into?

2.Should I invest my HSA or leave it be?

3.Should I be worried about the fees associated?

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grabiner
Advisory Board
Posts: 21352
Joined: Tue Feb 20, 2007 11:58 pm
Location: Columbia, MD

Re: Investing in HSA Help

Post by grabiner » Fri Jan 12, 2018 10:02 pm

If you are using your HSA for medical expenses, keep one year's deductible in cash, as part of your emergency fund. If you are maxing out your retirement accounts and thus paying current medical expenses out of pocket, you can invest the whole HSA.

Either way, you should contribute the maximum to your HSA for 2018; you can do that now unless you are using payroll deduction or employer contributions. (For example, if your employer contributes $100 per month, you can contribute an extra $2250 now so that you have more to invest.) I wouldn't invest in the market for the $2.90 monthly fee until you get a bit more for investment; $2.90 per month, which is $34.80 per year, is a cost of more than 1% right now, but once you get your 2018 contribution, it will be about 0.6%.

And when you do invest your HSA, invest it as if it was part of your IRA, since your HSA and IRA are both invested for your retirement expenses. If Total Stock Market or Total Bond Market belong in your retirement portfolio (they probably do), holding one of those in your HSA makes sense, given the very low cost.
David Grabiner

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