HSA options

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Brantley
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Joined: Mon Dec 03, 2012 1:02 am

HSA options

Post by Brantley » Fri Nov 10, 2017 9:36 pm

Hi folks,

Wife has a HDHP with an HSA. Can you help choose funds? There’s a $100 minimum investment per fund and we do not have much in the account as of now.

Edit: I have chosen to contribute 48% to S&P, 12% to vanguard extended market, and 40% to vanguard total international. No good bond options, so I believe this closely approximates total stock market with 60\40 US vs International split.

Funds are listed here: https://hsainvestments.com/fundperformance/?p=CYCC
~Brantley

youngpleb
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Joined: Mon Oct 16, 2017 7:06 pm

Re: HSA options

Post by youngpleb » Fri Nov 10, 2017 10:09 pm

It's tough to make any recommendations without first knowing the rest of your portfolio. What is your asset allocation like? These types of things are what will guide the funds you should pick for your HSA.

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Brantley
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Re: HSA options

Post by Brantley » Fri Nov 10, 2017 10:40 pm

Updated a previous post:


Emergency funds: Covered – Could draw from Inherited IRA if absolutely necessary
Debt: None
Tax Filing Status: Married
Tax Rate: 25% Federal, 5.3% State
State of Residence: MA
Age: Late 20s
Desired Asset allocation: 90% stocks / 10% bonds
Desired International allocation: 40% of stocks
Total portfolio size: Mid six figures
His Taxable - none
Her Taxable
– 12% T. Rowe Price New Horizons Fund (PRNHX) - .79% ER
– 5% Janus Twenty Fund Class D (JNTFX) - .72% ER
His 401k - 22% Vanguard Target Retirement 2055 Trust Plus (.08% ER)
Company match – 50% of first 6%
Her 401k
-22% - 100% Retirement Target Date 2055 Fund (40% Equity Index Fund, 12% EAFE Equity Index Fund, 12% Morgan Stanley International Equity Portfolio, 5.5% Mid-Cap Index, 4.5% Westfield Capital Small Cap Growth Portfolio, 4.5% Peregrine Small Cap Value Portfolio, 4% Mondrian Emerging Markets Equity, 3.5% Small-Cap Index, 3% PIMCO Fixed Income Portfolio, 3% Artisan Mid-Cap Growth Portfolio, 3% Sterling Mid-Cap Value Portfolio, 2% Wellington TIPS Portfolio, 1% Stone Harbor Global High Yield Portfolio, 1% Wells Fargo Government Money Market Fund, 1% Galliard Short-Term Bond Fund) (.29% ER)
Company match - 50% of 6%
His Roth IRA - 4% Vanguard Target 2055 VFFVX (.18% ER)
Her Roth IRA – 5% Fidelity Spartan® Total Market Index Fund Fidelity Advantage Class (FSTVX) - .05% ER
His Inherited Traditional IRA at Vanguard (taking RMDs over my expected life)
30% - 10% Vanguard Total Bond, 90% Equities (60/40 b/w total us and total int’l) – Admiral Shares (~.09% ER?)
New annual Contributions
Max his 401k
Max her 401k
~Brantley

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Brantley
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Re: HSA options

Post by Brantley » Sat Nov 11, 2017 9:47 am

Thoughts?
~Brantley

Mors
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Joined: Wed Aug 16, 2017 10:06 am

Re: HSA options

Post by Mors » Sat Nov 11, 2017 1:21 pm

Greetings.

Going 90-10 or 100-0 stocks bonds seems the best choice. The same combination that you did, Schwab S&P 500 + vanguard extended market + vanguard international stocks make for a solid core. The BlackRock Total Return K seems a decent choice for a bond fund, it would be better to invest in a cheaper bond index fund in another account, but with her current allocations, I would take a 10% of it.

The same apply to you too.

This is the allocation I would suggest as a result.

40% Schwab S&P 500

10% vanguard extended market

40% vanguard international stocks

10% BlackRock Total Return K

I guess that you can exchange the vanguard extended market with the schwab small cap for lower er, but you will probably be less diversified this way. The schwab international does not have emerging markets so it is not a proper replacement for the vanguard international.

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Brantley
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Re: HSA options

Post by Brantley » Sat Nov 11, 2017 2:28 pm

Mors wrote:
Sat Nov 11, 2017 1:21 pm
The BlackRock Total Return K seems a decent choice for a bond fund, it would be better to invest in a cheaper bond index fund in another account, but with her current allocations, I would take a 10% of it.
The ER of 0.53% seems too high to me. If needed I can bump up bonds in my Inherited IRA or elsewhere.
Mors wrote:
Sat Nov 11, 2017 1:21 pm
I guess that you can exchange the vanguard extended market with the schwab small cap for lower er, but you will probably be less diversified this way. The schwab international does not have emerging markets so it is not a proper replacement for the vanguard international.
I had the same thought process and landed with the vanguard account. M* did not love the schwab international so I decided to pass on that.
~Brantley

kazper
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Re: HSA options

Post by kazper » Mon Nov 13, 2017 3:21 pm

My first question would be, why do you think you need to invest the HSA money if it isn't a lot? Would it be better to wait? Are you absolutely sure you won't need that money for medical expenses in the short term- roughly 1-4 years?

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Brantley
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Re: HSA options

Post by Brantley » Mon Nov 13, 2017 6:06 pm

Likely no. My wife just started contributing and will max out so it will grow. She previously was contributing to a traditional IRA in addition to maxing the 401k but we’re now phased out after being married.

Based on her annual max out of pocket unless something catastrophic were to happen we are comfortable.
~Brantley

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