Author Topic: Do you invest your HSA money?  (Read 2756 times)


  • Magnum Stache
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Do you invest your HSA money?
« on: October 01, 2013, 10:47:03 AM »
I have an HSA account opened in Jan 2011 with about $6,000 in it, with contributions of $466 per month through the end of the year.  My health plan has $2,500 family deductible, with a total out-of-pocket max of $7,400.  I use the account to pay for medical expenses on an on-going basis. My daughter had some health issues this year that required specialist visits and treatment so we will probably hit the deductible soon (after which the plan changes to 10% co-pay).  Anyway, I want to start investing the money I have in the HSA and the question is, how much of a cash cushion should I leave in the account?  Also, what would you invest in? I was thinking about leaving $2K in cash, investing the rest.  Next year I will increase my contributions to the max allowed (my employer also kicks in another $800 into the account) and would like to invest all funds above the cushion.  The account is at Fidelity.


  • Bristles
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Re: Do you invest your HSA money?
« Reply #1 on: October 01, 2013, 11:18:56 AM »
i invested in bonds and i left enough for one years deductible in mine.  the rest is invested.  there are a few vanguard stocks that perform well, but i am risk averse and stick to mutual funds and bonds.  my hsa account is at bank of america.


  • 5 O'Clock Shadow
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Re: Do you invest your HSA money?
« Reply #2 on: October 01, 2013, 11:30:08 AM »
My previous employer that I left in March was switching to a HSA, which I was excited about.  So when I researched who to put the HSA with I was considering to use chase, but I ended up creating a HSA account and never contributing since I got a new job.  I think your investment options are limited to whom you have the HSA with.  Alot of banks seem to not allow investing.


  • Stubble
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Re: Do you invest your HSA money?
« Reply #3 on: October 02, 2013, 05:34:17 PM »
Yes we invest it, and we do have about 2K in the cash account--I believe that's a requirement of the particular HSA my employer provides.  It automagically sweeps anything above that into a separate investment account.

As a caveat though, I'll state that we've never, not even once, made a claim on it in the 3 years we've had it.  We pay all our health care bills out of pocket.  We've maxed out our allowed contributions to the HSA, my employer kicks in a bit more every year, and the balance is approaching $20,000 over that 3 year period.

Our plan is to use it as another tax deferred retirement account.  We try to keep all my health care bills so that we can eventually make the tax-free withdrawal claims, which I understand can be made whenever we want with no expiration.  Certainly if we had financial hardship and could not afford to pay my health care, we would dip into it, but knock on wood my family has had no major health care costs other than the occasional physicals and minor illnesses, dental/orthodontal work, etc.

I would put it in index funds if the plan offered that option, unfortunately they don't so it's in an equity growth fund.  We actually didn't start investing until May 2012.  The share price of that particular fund has gone up about 20% over that time (not that that's necessarily any indicator of future performance of course).


  • Pencil Stache
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Re: Do you invest your HSA money?
« Reply #4 on: October 02, 2013, 10:17:59 PM »
I use HSA bank and invest 100% of it in a total stock market ETF. I have enough savings elsewhere that it makes sense to never withdraw any funds from the HSA to pay for medical expenses. I get a tax deduction when I contribute and all earnings are tax exempt- best to let that principal grow.


  • Magnum Stache
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Re: Do you invest your HSA money?
« Reply #5 on: October 03, 2013, 04:14:16 AM »
Yes, my account sweeps everything over $3,000 into a mutual fund