Best HSA for "dormancy" account

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itworks
Posts: 107
Joined: Sat Jan 15, 2011 3:20 pm

Best HSA for "dormancy" account

Post by itworks » Sun Aug 12, 2018 1:05 pm

Alright, another best HSA topic, but this is for the case of dormant account.

No longer eligible for HSA contribution after a job change. I do have a sizable account with OptumBank, all in a single fund (Vanguard Total Stock). It was free of fees for employees, but $3/month for ex-employees. And there is a $2000 cash account drag.

Thinking about transferring out to another custodian with the following:
  • No ongoing/recurring fee. Happy to pay one-time setup fee/transaction fee
  • No cash account drag
  • Access to Vanguard Total Market
  • Friendly to dormant account since no new money can be added
  • Importantly, it has to be in-kind transfer in, otherwise the tax burden after the liquidation is no fun
PS: does any one know whether OptumBank support in-kind transfer out?

Please share your thoughts. Thanks!

Spirit Rider
Posts: 8871
Joined: Fri Mar 02, 2007 2:39 pm

Re: Best HSA for "dormancy" account

Post by Spirit Rider » Sun Aug 12, 2018 1:11 pm

Unless you live in a state that doesn't recognize HSA accounts (AL, CA or NJ) there is no state transaction tax burden and there is never a federal transaction tax burden. That is why we call them tax-advantaged accounts.

TravelforFun
Posts: 1506
Joined: Tue Dec 04, 2012 11:05 pm

Re: Best HSA for "dormancy" account

Post by TravelforFun » Sun Aug 12, 2018 1:46 pm

itworks wrote:
Sun Aug 12, 2018 1:05 pm
Alright, another best HSA topic, but this is for the case of dormant account.

No longer eligible for HSA contribution after a job change. I do have a sizable account with OptumBank, all in a single fund (Vanguard Total Stock). It was free of fees for employees, but $3/month for ex-employees. And there is a $2000 cash account drag
I have an account at Optum. I put in three years worth of health saving deposits then my company stopped offering high deductible plan so my account (100% stock fund) has been dormant. Optum doesn't charge me any fee at all so you might want to call them.

TravelforFun

John Laurens
Posts: 384
Joined: Mon Nov 14, 2016 7:31 pm

Re: Best HSA for "dormancy" account

Post by John Laurens » Sun Aug 12, 2018 2:06 pm

I would look at total costs for your “dormancy” HSA. At Lively, you will be charged $2.50 per month. Just have them zap your regular checking. Then invest 100% in a low cost etf with DRIP turned on at your Lively linked TDA brokerage account.

Regards,
John

Angst
Posts: 1850
Joined: Sat Jun 09, 2007 11:31 am

Re: Best HSA for "dormancy" account

Post by Angst » Sun Aug 12, 2018 2:19 pm

John Laurens wrote:
Sun Aug 12, 2018 2:06 pm
I would look at total costs for your “dormancy” HSA. At Lively, you will be charged $2.50 per month. Just have them zap your regular checking. Then invest 100% in a low cost etf with DRIP turned on at your Lively linked TDA brokerage account.

Regards,
John
Yes, I think you can do this w/ Lively, and keep your Vanguard Total Stock fund. You need to confirm the following with TDA, but I think you just need to transfer your HSA "in kind", turn on the DRIP and you should be done with it. Even though TDA doesn't offer Vanguard ETF's w/o a fee, I don't believe you'd be assessed a fee for the DRIP purchases, and the in kind transfer itself should (I believe) be doable w/o a fee as well. I don't think there's a good exact match for Vanguard's TSM in all the no-fee ETF's offered at TDA. Here's the list if you want to look up your choices: https://research.tdameritrade.com/grid/ ... onfree.asp

itworks
Posts: 107
Joined: Sat Jan 15, 2011 3:20 pm

Re: Best HSA for "dormancy" account

Post by itworks » Sun Aug 12, 2018 3:12 pm

Spirit Rider wrote:
Sun Aug 12, 2018 1:11 pm
Unless you live in a state that doesn't recognize HSA accounts (AL, CA or NJ) there is no state transaction tax burden and there is never a federal transaction tax burden. That is why we call them tax-advantaged accounts.
Unfortunately I do. Ah the great golden state!

itworks
Posts: 107
Joined: Sat Jan 15, 2011 3:20 pm

Re: Best HSA for "dormancy" account

Post by itworks » Sun Aug 12, 2018 3:18 pm

I have an account at Optum. I put in three years worth of health saving deposits then my company stopped offering high deductible plan so my account (100% stock fund) has been dormant. Optum doesn't charge me any fee at all so you might want to call them.

TravelforFun
The letter from Optum bank says $3/month is waived if the cash account balance is $5000 or more (for ex-employees)

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