Fidelity vs. Lively HSA

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PeterParker
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Fidelity vs. Lively HSA

Post by PeterParker » Wed Jan 09, 2019 3:18 pm

Okay. Currently have a $4k in employer HSA.

Also have $100 in Lively after opening a Lively HSA last year (never got around to the trustee-to-trustee transfer).

I NOW hear that as of January 2019, both Fidelity and Lively are offering a COMPLETELY FREE personal HSA account to people. There are no investment fees other than expense ratios, and possibly some other Mickey Mouse stuff on things other than low-cost mutual index funds (the only thing I care about).

SO NO FEES, each.

So here's the thing. I'm wondering if Fidelity has a more slick cash management aspect.

With Lively HSA, their investing is done through TD Ameritrade. It appears if I want to directly pay for medical expenses (or reimburse myself) via this account, I need to either keep a cash reserve, or liquidate the Ameritrade investments, in order to do so. Not terrible, but certainly a couple extra manual steps.

Does anyone know if Fidelity HSA has more slick options like their CMA. By which I mean, sweep accounts, auto-balancing, etc --- both so that it's fully automated, holds exactly what I want it to hold (which is little to no cash) --- yet I can pay bills with it instantly? Hell even a 2% money market fund will do for a small chunk. Anyone know this?

aristotelian
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Re: Fidelity vs. Lively HSA

Post by aristotelian » Wed Jan 09, 2019 3:46 pm

I don't see any difference. Both TD and Fidelity have standard cash management accounts for settling funds as such. Lively gives you more bells and whistles like the option to store receipt online and such. The interface more clearly labels contributions and such. Fidelity is more of a bare bones investment account that happens to be an HSA.

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PeterParker
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Re: Fidelity vs. Lively HSA

Post by PeterParker » Wed Jan 09, 2019 4:04 pm

I just saw on HSA report card (have really not used either Fidelity or Lively much at all) --- that they both have 'sweep' auto-invest features of sorts.

However, with Lively you potentially have to do an extra step according to HSA report card:
Automated transfers between the HSA account and TD Ameritrade (TDA) can be set up. Note that you must manually invest your HSA dollars once they reach the TDA brokerage account. The implementation of an automatic/systematic investing plan would be the only way to have HSA dollars automatically flow into investments.
Maybe they are overthinking it.

Look I know with a Fidelity brokerage/ CMA, you can at the least sweep things into some money market 2%, and withdraw money directly from that at an ATM.

In an ideal world, which doesn't exist, I'd have 100% of my HSA balance in stocks (hey it's my money) and if I made a debit transaction, it would simply instantly sell off that amount of the mutual fund. Obviously that's not possible, so I want the next best thing.

I guess technically I could just reimburse all my medical/ dental/ prescription eyewear expenses once at the end of the year, so basically do 1 stock sell transaction, and 1 transfer to my checking/ taxables. So two manual transactions but only once a year. Maybe I'll just stick with that. Put all my medical expenses on a generic 2% cashback card and go that route.

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PeterParker
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Re: Fidelity vs. Lively HSA

Post by PeterParker » Wed Jan 09, 2019 4:12 pm

Hell actually I guess some people here who really pinch pennies keep a running log of medial/dental/eyewear expenses and don't reimburse themselves for years (for maximal tax shelter growth).

Maybe I'll have a regular consumer credit card purely for that (to have one single digital record of all HSA-reimbursable costs) -- and then go back and reap the HSA every 2-4 years. No regular cash balance needed whatsoever for my HSA account. Hmm.

RobertD
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Re: Fidelity vs. Lively HSA

Post by RobertD » Wed Jan 09, 2019 4:25 pm

I use Lively and have my HSA balance 100% invested in stocks at TDA. The fee through last year was $30/year and it's now down to just $0 starting in 2019 for the usage of the TDA investment account.

I like Lively's feature to record each medical expense and upload receipts now for future reimbursement. I do this monthly as part of my monthly account reconciling.

My current plan is to not withdraw reimbursements from the HSA for many years to take advantage of the tax-free growth.

Likely there will be some fine tuning of when to start withdrawing reimbursements from the HSA somewhere in my 60s as I forecast expected medicare premiums which I also plan to fund from the matured HSA balance.

I don't foresee much need for cash management evaluation anytime soon since I want that HSA 100% equities at all time until in the future when I need to start pulling from it. Likely I'll just do block equity sales quarterly or annually for the drawdown depending on transaction fees at that time so still won't need cash management for that particular account.

Since Lively is a startup still I do keep a spreadsheet and receipt image backup for everything I'm uploading there just in case.
It is nice to see the checksum comparison of their view of my total unreimbursed expenses matching my spreadsheet.

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ginmqi
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Re: Fidelity vs. Lively HSA

Post by ginmqi » Wed Jan 09, 2019 4:42 pm

I'm moving my HSA over from Optum Bank to Fidelity after learning of their free individual HSA now is open.

Fidelity also has their new 0% index funds which I will put all my HSA dollars into...seems like a win win.

Lively HSA is trying to compete, but mainly I'd hate to have to through a secondary player, TD, to start investing whereas for Fidelity I can do everything under one website/portal. Just my 2 cents.

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Re: Fidelity vs. Lively HSA

Post by deltaneutral83 » Wed Jan 09, 2019 5:18 pm

PeterParker wrote:
Wed Jan 09, 2019 4:12 pm

Maybe I'll have a regular consumer credit card purely for that (to have one single digital record of all HSA-reimbursable costs) -- and then go back and reap the HSA every 2-4 years. No regular cash balance needed whatsoever for my HSA account. Hmm.
Print yearly receipts (usually 2 - Dentist), throw in file, if the medical office can email me, then it saves this step. First of the year, scan to cloud for year 20xx. Total time, 3 minutes per year. Will withdrawal whenever the need arises. I can't see this ever taking more than 5 minutes a year to save receipts year over year. Probably have much more receipts per year as time goes on.

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PeterParker
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Re: Fidelity vs. Lively HSA

Post by PeterParker » Wed Jan 09, 2019 9:08 pm

Any point in saving the receipts vs the credit card transaction? Is it ultimately for the IRS in case of audit?

Why even print and scan if you can take screenshots and upload to cloud?

Why even bother at all, I think I'd prefer the dedicated CC route. The least BS from my point of view.

TropikThunder
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Re: Fidelity vs. Lively HSA

Post by TropikThunder » Wed Jan 09, 2019 9:21 pm

PeterParker wrote:
Wed Jan 09, 2019 9:08 pm
Any point in saving the receipts vs the credit card transaction? Is it ultimately for the IRS in case of audit?

Why even print and scan if you can take screenshots and upload to cloud?

Why even bother at all, I think I'd prefer the dedicated CC route. The least BS from my point of view.
I'm not planning on saving receipts since I have no illusion of being so healthy that I can't spend all my HSA money on health costs after 65.

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Artsdoctor
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Re: Fidelity vs. Lively HSA

Post by Artsdoctor » Wed Jan 09, 2019 10:20 pm

PeterParker wrote:
Wed Jan 09, 2019 9:08 pm
Any point in saving the receipts vs the credit card transaction? Is it ultimately for the IRS in case of audit?

Why even print and scan if you can take screenshots and upload to cloud?

Why even bother at all, I think I'd prefer the dedicated CC route. The least BS from my point of view.
When it comes to most things tax-related, credit card statements are not sufficient. You're going to need the receipt.

If you can afford it, keep your HSA as an investment account. It's pre-tax dollars in, tax-free growth, and tax-free withdrawal. Use it decades later when it's grown exponentially.

The point of keeping receipts is IN CASE you need to tap the account earlier than expected. If you don't want to keep the receipts, just throw them away but you'll be discarding a safety net of sorts. The only problem with HSAs is that they can't be passed on to any entity other than spouse or non-profit without incurring full tax in the year of death, so they're tricky estate planning accounts.

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Re: Fidelity vs. Lively HSA

Post by Olemiss540 » Thu Jan 10, 2019 6:52 am

TropikThunder wrote:
Wed Jan 09, 2019 9:21 pm
PeterParker wrote:
Wed Jan 09, 2019 9:08 pm
Any point in saving the receipts vs the credit card transaction? Is it ultimately for the IRS in case of audit?

Why even print and scan if you can take screenshots and upload to cloud?

Why even bother at all, I think I'd prefer the dedicated CC route. The least BS from my point of view.
I'm not planning on saving receipts since I have no illusion of being so healthy that I can't spend all my HSA money on health costs after 65.
But you seem to have a bit of an illusion of the possibility of not being ALIVE after 65.....
Last edited by Olemiss540 on Thu Jan 10, 2019 2:53 pm, edited 1 time in total.
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.

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sperry8
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Re: Fidelity vs. Lively HSA

Post by sperry8 » Thu Jan 10, 2019 8:09 am

TropikThunder wrote:
Wed Jan 09, 2019 9:21 pm
PeterParker wrote:
Wed Jan 09, 2019 9:08 pm
Any point in saving the receipts vs the credit card transaction? Is it ultimately for the IRS in case of audit?

Why even print and scan if you can take screenshots and upload to cloud?

Why even bother at all, I think I'd prefer the dedicated CC route. The least BS from my point of view.
I'm not planning on saving receipts since I have no illusion of being so healthy that I can't spend all my HSA money on health costs after 65.
Exactly how I feel. I'll worry about saving receipts when I'm older. Can't imagine I'll need to go back decades to "reimburse myself".
BH contest results: 2018: #150 of 493 | 2017: #516 of 647 | 2016: #121 of 610 | 2015: #18 of 552 | 2014: #225 of 503 | 2013: #383 of 433 | 2012: #366 of 410 | 2011: #113 of 369 | 2010: #53 of 282

Topic Author
PeterParker
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Re: Fidelity vs. Lively HSA

Post by PeterParker » Thu Jan 10, 2019 12:36 pm

Who are these receipts for? IRS audits? How far back do those go? 5 years?

You're telling me if I spend $100 at Dr. John Walsh, D.D.S on my credit card, and in the unlikely event the IRS actually audits me, and the credit card statement is insufficient, and then I call up the Dentist who has existed for decades, and somehow THEY can't furnish a receipt, that the IRS will actually sue me for tax fraud that didn't actually exist?

Should I invest in tinfoil hats while I'm at it?

Also; I get you people that don't plan on withdrawing until you're 65 for medical costs (if you're not dead by then). Current data --- if you're born in 1960, you had a 64% of even living to age 65 in the United States. Currently, the projections now are closer to 80%.

Also --- the idea of withdrawing from an HSA as you go (somewhat) is that 100% tax free money has value now as well, potentially greater than your anticipated 7% compounding returns (or whatever). Whether it's a short-term investment, housing purchase, or heck... going wind-surfing and plowing models in Europe (something you might not end up doing at a 65 year old fart). $1000 reimbursed from the HSA in the NOW for medical costs incurred is $1000 in your pocket NOW (tax free).

Ultimately that depends on your total savings rate vs. liquid needs in the short term. Still though, my healthcare right now is pretty dang good. I pay $50 a month and have a $1000 deductible and out-of-pocket max at age 31. [OT comment removed by admin LadyGeek] (The only thing that really burns people are ER visits and ambo rides, avoid that at all costs).

My Dad is 60. He is unemployed. With his stipend, and no job (albeit rental income), he literally pays 60 cents a month for healthcare and has a $500 deductible. That's due to ObamaCare/ the Affordable Care Act/ the Silver plan on the exchanges. If I were in his shoes, I wouldn't be able to "burn through" the HSA fast enough. Now, after 59.5, I know you can treat the HSA as an IRA for non-medical. You can withdrawal and pay taxes on one-side (like a tIRA). Still, if you want the NO TAXES EVER, just burn through it as you go. There isn't much harm. Well, if your healthcare plan is as favorable as mine is.

TropikThunder
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Re: Fidelity vs. Lively HSA

Post by TropikThunder » Thu Jan 10, 2019 7:56 pm

PeterParker wrote:
Thu Jan 10, 2019 12:36 pm
Ultimately that depends on your total savings rate vs. liquid needs in the short term. Still though, my healthcare right now is pretty dang good. I pay $50 a month and have a $1000 deductible and out-of-pocket max at age 31. I can get my balls massaged by Dr. Sanjay Gupta and have 10 different kinds of cancer and not burn through my HSA for decades to come. (The only thing that really burns people are ER visits and ambo rides, avoid that at all costs).
If you have a $1,000 deductible, then you don't have a High Deductible Health Plan, and aren't even eligible for an HSA in the first place.
The IRS defines a high deductible health plan as any plan with a deductible of at least $1,350 for an individual or $2,700 for a family. An HDHP’s total yearly out-of-pocket expenses (including deductibles, copayments, and coinsurance) can’t be more than $6,650 for an individual or $13,300 for a family. (This limit doesn't apply to out-of-network services.)
https://www.healthcare.gov/glossary/hig ... alth-plan/

ulladulla28
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Re: Fidelity vs. Lively HSA

Post by ulladulla28 » Thu Feb 07, 2019 11:39 am

I bit the bullet on moving from Lively to Fidelity, just due to preferring the NTF investment options at Fidelity over TDA.

We have always paid medical expenses on credit cards to collect the points and then reimbursed ourselves from Lively. It was a fairly easy process on Lively, but it looks like it might be a little more ambiguous through Fidelity since they do not have a way of tracking your expenses and storing receipts.

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Re: Fidelity vs. Lively HSA

Post by MikeG62 » Thu Feb 07, 2019 12:47 pm

I moved my one year old HSA from Lively to Fidelity a month or so ago. Although I thought Lively was just fine, having the funds at Fidelity where a very large % of my other funds are just made more sense. Plus, who knows whether Lively can sustain their business model now that they were forced to cut their fees to match others like Fidelity. At least I have very high confidence that Fidelity is going to be around a very long time.

I do hope Lively makes it for the long haul though.
Real Knowledge Comes Only From Experience

Topic Author
PeterParker
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Re: Fidelity vs. Lively HSA

Post by PeterParker » Thu Feb 14, 2019 1:00 am

TropikThunder wrote:
Thu Jan 10, 2019 7:56 pm
PeterParker wrote:
Thu Jan 10, 2019 12:36 pm
Ultimately that depends on your total savings rate vs. liquid needs in the short term. Still though, my healthcare right now is pretty dang good. I pay $50 a month and have a $1000 deductible and out-of-pocket max at age 31. I can get my balls massaged by Dr. Sanjay Gupta and have 10 different kinds of cancer and not burn through my HSA for decades to come. (The only thing that really burns people are ER visits and ambo rides, avoid that at all costs).
If you have a $1,000 deductible, then you don't have a High Deductible Health Plan, and aren't even eligible for an HSA in the first place.
The IRS defines a high deductible health plan as any plan with a deductible of at least $1,350 for an individual or $2,700 for a family. An HDHP’s total yearly out-of-pocket expenses (including deductibles, copayments, and coinsurance) can’t be more than $6,650 for an individual or $13,300 for a family. (This limit doesn't apply to out-of-network services.)
https://www.healthcare.gov/glossary/hig ... alth-plan/
Well it's a $1500 deductible but the employer contributes $500 to the employer custodian HSA. It says HDHP HSA plan on it. Seems legal beagle to me but eh.
Last edited by PeterParker on Thu Feb 14, 2019 1:02 am, edited 1 time in total.

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