Author Topic: How to move my money?  (Read 2877 times)

homeymomma

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How to move my money?
« on: February 09, 2015, 06:37:24 PM »
i have 2K and 1K in two taxable accounts with betterment. We recently gained access to an HSA with our new 2015 insurance plan. I've opened the HSA with benefitwallet (aside... any notes on benefitwallet?). Id like to move all the money from both taxable accounts to the HSA. Should I be worried about anything involved in withdrawing my invested funds? I've only ever opened accounts and deposited $$, I've never closed an account, or made a withdrawal. I don't know a thing about market timing or taxes or anything. And I don't have a clue if they're a concern in this situation...

My plan is to just withdraw the money into my checking account, then deposit it into the HSA ASAP.

Apologies for what is probably a super dumb question!

MDM

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Re: How to move my money?
« Reply #1 on: February 09, 2015, 08:35:20 PM »
Not dumb at all - better to know beforehand than repent afterward.

There could be tax due on the sale of the taxable account.  Depends on how much the value has increased above what you contributed, how much is short term vs. long term capital gain, your total taxable income including those capital gains, etc.

Don't know about Betterment, but other brokers have a "what if?" application that tells you the tax implications if you choose to sell some or all of your holdings.  Might be worth poking around the web site, or calling them.  Or maybe a Betterment maven will chime in....

Can you fund the HSA out of cash flow instead of re-purposing the Betterment funds?
« Last Edit: February 11, 2015, 10:57:09 AM by MDM »

homeymomma

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Re: How to move my money?
« Reply #2 on: February 11, 2015, 10:05:49 AM »
Can't max out the HSA with cash flow. We barely manage to max out two Roths each year.
Just figured it would be better to keep that money growing tax-free instead of taxed, especially since lowering our MAGI (which I believe HSA contributions do) helps keep our kids on the state health insurance plan-saving us 400/mo.

Put a call in to betterment is a good idea.

Thanks!

BaldingStoic

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Re: How to move my money?
« Reply #3 on: February 11, 2015, 10:59:31 AM »
Everything should be straight-forward.  Just a couple suggestions:  First carefully look at the fees associated with the HSA.  I started an HSA this year and was surprised at the multitude of fees, including monthly maintenance (HSA is through my employer so I don't have the option to shop around).  My guess is that the tax benefit will more then offset the fee but better save then sorry.

Now to your original questions, you should be able to simply zero out your betterment funds.  In a day or two they will be credited to your checking account and from there transfer into your HSA.  Short-term capital gains are taxed at a higher rate then long-term capital gains but with only a few grand invested the tax implication should be trivial.  Follow-up with Betterment to make sure your accounts are closed properly.