What to do with HSA (HSAbank) money? NJ

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standard7
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What to do with HSA (HSAbank) money? NJ

Post by standard7 » Wed May 15, 2019 3:37 pm

Well... the money in my HSA is roughly 15k and to be honest I have not done anything with it. I believe it's collecting somewhere between .35-.45%.

My options are to look into offerings from TD Ameritrade. There is a very good discussion on NTF MMF's at TD Ameritrade here:
viewtopic.php?f=1&t=269305&start=50

UPDATE: I am moving from HSA bank to Fidelity - but same issues apply with finding appropriate investments for NJ: see below - viewtopic.php?f=1&t=281179#p4547362

From this discussion, it seems clear that TDA has rigged their Mutual Fund screener to be relatively not helpful since there doesn't appear to be a way to include a secondary filter for example: NoTransactionFee>Money Market

Since the HSA interest is tax exempt at the Federal level, where would you put the money that could potentially be needed tomorrow, or in 20 years for whatever is going to happen to me and I need to pay the doctors bill?

thanks in advance!
Last edited by standard7 on Sat May 18, 2019 7:46 am, edited 2 times in total.

MotoTrojan
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Re: What to do with HSA (HSAbank) money?

Post by MotoTrojan » Wed May 15, 2019 3:46 pm

In CA or NJ? If so there’s state tax considerations. Otherwise I’d invest as if it were a Roth personally. Mostly equity but nothing wrong with bonds if you need them. It’s technicallf more tax-efficient than a Roth since you pay no tax on contribution or withdrawal but that savings is a sunk cost. $1 in HSA is equivalent to $1 in Roth.

Look at portfolio as a while. If TD only has a few low cost options pick one and allocate your other accounts around it.

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standard7
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Re: What to do with HSA (HSAbank) money?

Post by standard7 » Wed May 15, 2019 3:57 pm

Hi MotoTrojan

All good ideas+questions !

Yes to NJ. I did notice that there is TRowePrice NJ tax free fund in their no transaction fee category > NJTFX

"look at portfolio as a whole"

I can put this into either stocks or bonds and rebalance the rest of my portfolio to accommodate any offset. My feeling is that the HSAbank/TDAmeritrade will be more cumbersome to move around than my other accts. So, I'm tempted to just put it into NJTFX or other bond fund.

Any thoughts on NJTFX?

thanks again,

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standard7
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Re: What to do with HSA (HSAbank) money?

Post by standard7 » Thu May 16, 2019 1:05 pm

Well... I realized that I just don't want to add the annoyance of the TD Ameritrade account. So, I have decided to setup an HSA with Fidelity and move it out of HSA Bank. The no fee, and easier management seem like it will be worth the effort.

And so far the move account setup and online form submission for the transfer was very easy with Fidelity. Looks like it will take a couple weeks for both companies to complete the transfer but that is to be expected.

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grabiner
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Re: What to do with HSA (HSAbank) money?

Post by grabiner » Fri May 17, 2019 9:01 pm

standard7 wrote:
Wed May 15, 2019 3:57 pm
Yes to NJ. I did notice that there is TRowePrice NJ tax free fund in their no transaction fee category > NJTFX
You don't want that fund in an HSA, as you waste the federal tax exemption on the munis. Use a Treasury or TIPS fund instead. In NJ, not only dividends but also capital gains on Treasury and TIPS funds are tax-exempt.

A good ETF choice would be IPE, the SPDR TIPS ETF, which is commission-free at TD Ameritrade. For a large investment, you might prefer Schwab's similar SCHP, with 0.05% rather than 0.15% expenses; that difference might outweight the commission you would otherwise pay.
Wiki David Grabiner

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standard7
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Re: What to do with HSA (HSAbank) money?

Post by standard7 » Fri May 17, 2019 9:13 pm

Thank you. Since I will be moving the HSA to Fidelity, what are your thoughts about FDLXX treasury only fund?

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Re: What to do with HSA (HSAbank) money?

Post by grabiner » Fri May 17, 2019 10:53 pm

standard7 wrote:
Fri May 17, 2019 9:13 pm
Thank you. Since I will be moving the HSA to Fidelity, what are your thoughts about FDLXX treasury only fund?
That is a money-market fund. For money you don't intend to spend in the next year, you would probably prefer a Treasury fund, most likely TIPS, and I believe the ETFs are less expensive than most of Fidelity's funds.. iShares ETFs are commission-free at Fidelity.
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standard7
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Re: What to do with HSA (HSAbank) money?

Post by standard7 » Sat May 18, 2019 5:21 am

Thank you!

3-20Characters
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Re: What to do with HSA (HSAbank) money?

Post by 3-20Characters » Sat May 18, 2019 5:47 am

Fyi: It took me three tries to close my HSA ank account after moving it to Fidelity. They kept racking up fees on the zero balance. Then they asked for a $25 fee to close the account although they previously stated there would be no fee. I finally got it sorted out.

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Re: What to do with HSA (HSAbank) money?

Post by rai » Sat May 18, 2019 5:55 am

I put mine 100% in VTI (Vanguard total stick market index).
"Life is what happens to you while you're busy making other plans" - John Lennon. | | "You say that money, isn't everything | But I'd like to see you live without it." - Silverchair

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standard7
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Re: What to do with HSA (HSAbank) money? NJ

Post by standard7 » Sat May 18, 2019 7:32 am

Hi Rai
VTI
Thanks, I do have enough total stock funds in the portfolio, so I'm good with that. And living in NJ, I have to wrestle with the problem that NJ doesn't recognize HSA accounts. HSA contributions are not deductible and all gains/interest are taxable.

Looks like the iShares TIPS fund that David recommended may be the best fit and easiest solution. I do have a couple weeks until the move will be finalized to Fidelity... so any additional thoughts are welcome!

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standard7
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Re: What to do with HSA (HSAbank) money?

Post by standard7 » Sat May 18, 2019 7:37 am

3-20Characters wrote:
Sat May 18, 2019 5:47 am
Fyi: It took me three tries to close my HSA ank account after moving it to Fidelity. They kept racking up fees on the zero balance. Then they asked for a $25 fee to close the account although they previously stated there would be no fee. I finally got it sorted out.
Hi 3-20Characters

Well.. that doesn't sound good. Did you submit your transfer online through the Fidelity website or send a paper form via mail to HSA bank?

I made the submission through the Fidelity website and it was easy so far. In 2 days they had completed the account setup and have sent the transfer request to HSA Bank. I was hoping that they will close the account without my interaction. So, thanks for the heads-up I will pay attention.

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standard7
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Re: What to do with HSA (HSAbank) money?

Post by standard7 » Sat May 18, 2019 7:41 am

Hi David

I have discovered the best way to learn about NJ/CA HSA accounts and where to invest.... search on - grabiner HSA
It looks like there could be an entire forum for : NJ and California HSA investing

many thanks.


grabiner wrote:
Fri May 17, 2019 10:53 pm
standard7 wrote:
Fri May 17, 2019 9:13 pm
Thank you. Since I will be moving the HSA to Fidelity, what are your thoughts about FDLXX treasury only fund?
That is a money-market fund. For money you don't intend to spend in the next year, you would probably prefer a Treasury fund, most likely TIPS, and I believe the ETFs are less expensive than most of Fidelity's funds.. iShares ETFs are commission-free at Fidelity.

3-20Characters
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Re: What to do with HSA (HSAbank) money?

Post by 3-20Characters » Sat May 18, 2019 8:39 am

standard7 wrote:
Sat May 18, 2019 7:37 am
3-20Characters wrote:
Sat May 18, 2019 5:47 am
Fyi: It took me three tries to close my HSA ank account after moving it to Fidelity. They kept racking up fees on the zero balance. Then they asked for a $25 fee to close the account although they previously stated there would be no fee. I finally got it sorted out.
Hi 3-20Characters

Well.. that doesn't sound good. Did you submit your transfer online through the Fidelity website or send a paper form via mail to HSA bank?

I made the submission through the Fidelity website and it was easy so far. In 2 days they had completed the account setup and have sent the transfer request to HSA Bank. I was hoping that they will close the account without my interaction. So, thanks for the heads-up I will pay attention.
I had $5k cash at HSA Bank (to avoid monthly fee) and the rest at TDA invested. I moved all funds from HSA Bank to TDA and initiated the transfer from Fidelity. All done online in minutes.

TDA and Fidelity were both great in handling everything. I had called HSA Bank beforehand to confirm about closing the account. They said no fees or charges. I kept notes. I received a letter every month for the next three months from HSA Bank telling me that my account was in arrears due to low balance fee. One time, I was on hold for an hour to get through. It finally got straightened out. I wasn’t going to pay fees because they changed their mind (principle of the thing). It was worth it to have it done. The Fidelity hsa is the best deal for me right now. I hold everything in zero funds and I don’t have to keep 5k in cash at basically zero interest, like I did at HSA Bank.

Good luck!

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Re: What to do with HSA (HSAbank) money?

Post by grabiner » Sat May 18, 2019 5:40 pm

standard7 wrote:
Sat May 18, 2019 7:41 am
Hi David

I have discovered the best way to learn about NJ/CA HSA accounts and where to invest.... search on - grabiner HSA
It looks like there could be an entire forum for : NJ and California HSA investing
The relevant information for this, and for many other topics, is in the Wiki. For HSAs, see Health savings account.
Wiki David Grabiner

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standard7
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Re: What to do with HSA (HSAbank) money? NJ

Post by standard7 » Sat May 18, 2019 7:35 pm

Thanks David,

I definitely under utilize the Wiki, the link is a good reminder and very good info.

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