Investing in HSA Help

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BeautifulDisaster
Posts: 47
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: $3,832.51 ($1,000 reserve, $2832.51 able to invest)
Fees: $2.90 per month to use Benefit Wallet / Save Daily
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)

The rest of my portfolio:
401k - Maxed w/ Vanguard Target Retirement2055
RothIRA - Maxed w/ Vanguard Target Retirement2055
Brokage - 10k Vanguard Total Stock Market ETF


My thought is to invest my HSA into:
50% Vanguard Total Stock Market Instl (VITSX)
50% Vanguard Total Bond Market Index Admiral (VBTLX)


Questions:
1.Are the funds I selected a good option? Any recommendations?

2.I currently am maxing out the contributions to my HSA for 2018, though it's payroll deducted. Being said, at the end of the year, there'll be $5176.97 that I can invest (lower the cost from the current 1.56% to .67%). Should I wait until then or begin to invest now?
Last edited by BeautifulDisaster on Fri May 18, 2018 11:35 am, edited 1 time in total.

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grabiner
Advisory Board
Posts: 22191
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.
Wiki David Grabiner

BeautifulDisaster
Posts: 47
Joined: Thu Jan 11, 2018 12:56 pm

Re: Investing in HSA Help

Post by BeautifulDisaster » Fri May 18, 2018 11:36 am

Bringing this post back alive with updates made to the OP.

Thanks in advance for all your help and insight!

DarkHelmetII
Posts: 103
Joined: Mon Jul 24, 2017 12:25 pm

Re: Investing in HSA Help

Post by DarkHelmetII » Fri May 18, 2018 3:14 pm

Optum Bank has decent Vanguard investment options such as Wellington. They do have a monthly fee but waived once you have $3,000 - $5,000 (I forget the exact threshold). Unfortunately threshold excludes investments portion unless you are grandfathered in from a prior plan (for example I was grandfathered in from Wells Fargo so my investment balance counts toward minimum).

Strategically I personally think HSA is a great investment vehicle due to triple tax benefit, especially if you can keep the fees low.

billthecat
Posts: 207
Joined: Tue Jan 24, 2017 2:50 pm

Re: Investing in HSA Help

Post by billthecat » Fri May 18, 2018 3:24 pm

Is there any logic to investing your HSA in a healthcare fund? Thinking that the returns would approximate the change in healthcare prices?

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