Leaving a job with HSA

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Topic Author
seattletom1
Posts: 30
Joined: Wed Aug 17, 2016 1:37 pm

Leaving a job with HSA

Post by seattletom1 »

Hi,
My wife will be switching from a job with an HSA to one without. We were using this account as a retirement type account and not for medical expenses. There is currently about $5000 in VIIIX at Health Equity.

My first question is about this years contributions. Can she contribute the full 2017 amount because she had a HPHP this year or is it prorated to the actual months you were enrolled in the plan? Since the funds are taken out of her check she will have contributed about 1800 of the 3400 allowed for 2017. Can I still put more in? If so do I need to do it before she leaves her job or anytime in 2017?

The second question is what to do with it after she leaves. I read most of the WIKI and looked at the options. I’m just looking for the cheapest longterm place to park the money and not touch it. Any advice?

Thanks for the help!
TOM
jebmke
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Location: Delmarva Peninsula

Re: Leaving a job with HSA

Post by jebmke »

Generally it is prorated. All of this is outlined in IRS pub 969 and the instructions for form 8889.
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Topic Author
seattletom1
Posts: 30
Joined: Wed Aug 17, 2016 1:37 pm

Re: Leaving a job with HSA

Post by seattletom1 »

jebmke wrote:Generally it is prorated. All of this is outlined in IRS pub 969 and the instructions for form 8889.
Thanks! This was what I was looking for. It's like you said. Looks like only for months enrolled.
annielouise
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Re: Leaving a job with HSA

Post by annielouise »

Do you do business with a credit union? We were able to transfer my husband's HSA to ours. No fees (of course) unlike the bank his company partnered with. The CU also provides an investment option for the HSA. We moved about half of the money into that and have been earning about 7% a year (we selected a low risk option).
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The529guy
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Re: Leaving a job with HSA

Post by The529guy »

annielouise wrote:Do you do business with a credit union? We were able to transfer my husband's HSA to ours. No fees (of course) unlike the bank his company partnered with. The CU also provides an investment option for the HSA. We moved about half of the money into that and have been earning about 7% a year (we selected a low risk option).
Could you tell us more about the low risk option earning about 7% a year?
Spirit Rider
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Re: Leaving a job with HSA

Post by Spirit Rider »

The529guy wrote:Could you tell us more about the low risk option earning about 7% a year?
Given that Vanguard's LifeStrategy Conservative Growth Fund (40% equities / 60% bonds) averaged about 8% return over the past eight years, it is not that hard to imagine a relatively lower risk investment over a comparable recent time period could earn 7%.

Of course, this was the result of fortuitous timing and moving forward it will likely be quite a bit less than that.
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The529guy
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Re: Leaving a job with HSA

Post by The529guy »

Spirit Rider wrote:
The529guy wrote:Could you tell us more about the low risk option earning about 7% a year?
Given that Vanguard's LifeStrategy Conservative Growth Fund (40% equities / 60% bonds) averaged about 8% return over the past eight years, it is not that hard to imagine a relatively lower risk investment over a comparable recent time period could earn 7%.

Of course, this was the result of fortuitous timing and moving forward it will likely be quite a bit less than that.
Fair enough, though Vanguard classifies LifeStrategy Conservative Growth as "Moderate funds—Risk level 3." I'm still curious to hear what this poster's "low risk option" is.
annielouise
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Re: Leaving a job with HSA

Post by annielouise »

The529guy wrote:
annielouise wrote:Do you do business with a credit union? We were able to transfer my husband's HSA to ours. No fees (of course) unlike the bank his company partnered with. The CU also provides an investment option for the HSA. We moved about half of the money into that and have been earning about 7% a year (we selected a low risk option).
Could you tell us more about the low risk option earning about 7% a year?
I should have said "lower" risk. It is the lowest risk investment option they have, but it is still a mix of investment funds. And, of course, the 7% is due to the recent bull market (we've had it about 4 years), and will not likely be our long term return. They are funds that I would never select myself, but we get discounts in fees through our credit union, so they aren't bad.
Topic Author
seattletom1
Posts: 30
Joined: Wed Aug 17, 2016 1:37 pm

Re: Leaving a job with HSA

Post by seattletom1 »

No HSA through BECU the credit union I use. Thanks for the idea though.

TOM
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