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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: FITortoise on July 20, 2019, 09:45:25 PM

Title: Keep money in HSA or move after job change?
Post by: FITortoise on July 20, 2019, 09:45:25 PM

Hello!

I have ~$9k in HSA (but in an associated investment account) with a former job. I can leave the money as-is but pay a monthly fee, or take distribution and move it elsewhere (regular brokerage account?). With the hassle involved in getting the distribution and tax implications from it, this option doesn't look appealing. What would you consider? What would you do?

Thank you.

Title: Re: Keep money in HSA or move after job change?
Post by: Steeze on July 21, 2019, 05:50:17 AM

I’m not 100% sure, but it remember reading that fidelity has a no fee HSA account now. Might be something to look in to. I have mine in HSA Bank and should probably move mine if Fidelity’s is free.

Title: Re: Keep money in HSA or move after job change?
Post by: terran on July 21, 2019, 06:57:15 AM

Don't take the money out of the HSA, move the HSA.

I would recommend Fidelity. As @Steeze says it is fee free. And it has good investment options.

You can request a trustee to trustee transfer, but this often incurs a fee from the HSA you're leaving. You can also make an indirect rollover by withdrawing everything from the old HSA (just like you would if reimbursing yourself for a medical expense), then filling out a form and mailing a check in to Fidelity for the full amount you withdrew. You can do only one indirect rollover per rolling 12 month period (not calendar year). Subsequent indirect rollovers will be disqualified and count as a distribution, which you don't want.

You'll need to fill out Form 8889 when you do your taxes.