HSA sucks: Help

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
jackal
Posts: 88
Joined: Thu Jan 14, 2010 7:24 am

HSA sucks: Help

Post by jackal » Tue Feb 13, 2018 4:53 pm

My current HSA charges a fee of 0.36% per year to invest in a vanguard fund. I was going to contribute my money as a lumpsum and transfer it to HSA bank but my employer doesn't allow that. I have two options:
1. Take the employer contribution. Contribute to my HSA account over the year. Transfer it at year end.
2. Transfer my HSA contribution now (My employer puts in the whole amount upfront). Transfer it to HSA bank. Put my part of the contribution directly into HSA bank now.

Any pros or cons to either way? Any difference in payroll taxes owed?
Thank you.

aristotelian
Posts: 4377
Joined: Wed Jan 11, 2017 8:05 pm

Re: HSA sucks: Help

Post by aristotelian » Tue Feb 13, 2018 5:04 pm

Best deal I have found is Lively. Same TD Ameritrade platform for about half the price of HSA Bank.

viewtopic.php?t=228522

You want your employer to make the contribution, that way you should avoid FICA tax.

User avatar
mhc
Posts: 3707
Joined: Mon Apr 04, 2011 10:18 pm
Location: NoCo

Re: HSA sucks: Help

Post by mhc » Tue Feb 13, 2018 5:17 pm

#2 will have higher payroll taxes.

Easy Rhino
Posts: 3267
Joined: Sun Aug 05, 2007 11:13 am
Location: San Diego

Re: HSA sucks: Help

Post by Easy Rhino » Tue Feb 13, 2018 5:23 pm

I would go ahead and contribute to your employers, and then do a rollover which doesn't require assistance from the bank, to your preferred HSA every 12+ months.

jackal
Posts: 88
Joined: Thu Jan 14, 2010 7:24 am

Re: HSA sucks: Help

Post by jackal » Tue Feb 13, 2018 6:04 pm

How much payroll taxes are we talking about(for someone who has to pay past the ss taxes anyways...make over 250k in taxable income)? I read the amount I directly contribute is fed/state tax deductible but that payroll taxes are lost. The reason for the question: let’s say it’s 2.5%: am I better off just taking the hit and investing the money for a growth of 2.5% by yer end.
Thank you!

nps
Posts: 548
Joined: Thu Dec 04, 2014 10:18 am

Re: HSA sucks: Help

Post by nps » Tue Feb 13, 2018 6:16 pm

jackal wrote:
Tue Feb 13, 2018 6:04 pm
How much payroll taxes are we talking about(for someone who has to pay past the ss taxes anyways...make over 250k in taxable income)? I read the amount I directly contribute is fed/state tax deductible but that payroll taxes are lost. The reason for the question: let’s say it’s 2.5%: am I better off just taking the hit and investing the money for a growth of 2.5% by yer end.
Thank you!
Medicare is 1.45 percent up to $200k, 2.35 percent above.

jackal
Posts: 88
Joined: Thu Jan 14, 2010 7:24 am

Re: HSA sucks: Help

Post by jackal » Wed Feb 14, 2018 1:31 pm

It wouldn’t be too dumb to accept the 2.35% penalty to contribute to a stock heavy portfolio at year beginning then right?

nps
Posts: 548
Joined: Thu Dec 04, 2014 10:18 am

Re: HSA sucks: Help

Post by nps » Wed Feb 14, 2018 6:52 pm

Are you not able to put the max in quickly through payroll deduction?

jackal
Posts: 88
Joined: Thu Jan 14, 2010 7:24 am

Re: HSA sucks: Help

Post by jackal » Thu Feb 22, 2018 11:14 pm

nope... only over the year!

Olemiss540
Posts: 518
Joined: Fri Aug 18, 2017 8:46 pm

Re: HSA sucks: Help

Post by Olemiss540 » Fri Feb 23, 2018 8:24 am

You make 250k but are concerned about $25 per year.

Roll it over at the end of every year and don't worry about it. .3 ER is ALOT to a Boglehead, but 12 months is nothing.
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.

Post Reply