Author Topic: Are any of these funds in my HSA worthwhile?  (Read 1789 times)

m8547

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Are any of these funds in my HSA worthwhile?
« on: October 27, 2015, 10:57:13 PM »
Are any of these investment options in my HSA worthwhile? My employer gives me $900 per year in the HSA for free, but I'm considering putting more in. Right now I max out my 401K, Roth IRA, and ESPP, and invest a little more in taxable accounts. It sounds like if I contribute to my HSA it's a "cafeteria plan" (what does that even mean? that's a stupid name) so I save on FICA tax in addition to income tax.

I did a spreadsheet earlier today, and it looks like after about 30 years the higher expense ratios (compared to Vanguard funds) eat up all the tax savings.  I could open an account with another company like HSA bank, but the monthly/annual fees with companies I've found are significant while the size of investment is small, and I'm not sure I want to continue to max out this account for a long time so I don't end up with too much money that I can't use. Plus having two accounts is a hassle, and I need to keep the one my company provides because that's where the contributions have to go.

This HSA is formerly through Chase. It was bought by HSA Bank, but they haven't transitioned anything over yet. I don't know what would happen if I end up with two HSA bank accounts? I don't know what it will look like after the transition. They say it will be "seamless".

So are any of these investment options any good? I looked up some of the lower expense ratio ones, and it looks like they under-perform the market, compared to larger index funds.

ShoulderThingThatGoesUp

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Re: Are any of these funds in my HSA worthwhile?
« Reply #1 on: October 28, 2015, 06:12:17 AM »
We have the same problem, and I think the same provider. Here's the thread I posted on it. The recommendation was simply to set up a new HSA with a better provider. I don't have so much in my HSA yet to make that a good idea, but I'm maxing it next year. Maybe by then HSA Bank will have truly taken it over.

Scandium

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Re: Are any of these funds in my HSA worthwhile?
« Reply #2 on: October 28, 2015, 06:58:33 AM »
HLEIX and MDDIIX are both index funds, and they sound decent. The ERs are a bit high, both nothing outrageous. I'd do 60/40 those, i.e. US/international. I don't know what you mean about the performance. The chart for HLEIX looks almost identical to VTSAX to me. And research by Bogle showed that lower expenses correlate to higher returns.

m8547

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Re: Are any of these funds in my HSA worthwhile?
« Reply #3 on: October 28, 2015, 08:14:08 PM »
HLEIX is supposed to track the S&P500, but it doesn't keep up if you look back a few years. VTSAX follows the S&P500 very closely (though I think it actually tracks a different index with more stocks). Am I missing something like dividends that make up the difference?
https://www.google.com/finance?q=VTSAX%2CHLEIX%2CINDEXSP%3A.INX&ei=Un8xVpDfJMbDjAGmzpu4DQ

MVal

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Re: Are any of these funds in my HSA worthwhile?
« Reply #4 on: October 29, 2015, 09:08:01 AM »
Hey, here's maybe a dumb question from a newbie--can you move funds from an old HSA account to a new one? Like if you have an HSA in a bank account from a former employer and then you get a new HSA from your new employer, can you just combine the two accounts? How?

m8547

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Re: Are any of these funds in my HSA worthwhile?
« Reply #5 on: October 29, 2015, 06:56:44 PM »
Yes, you can transfer between HSAs, and once a year you can do a rollover. There is usually a form at your HSA provider to initiate the request. Transfer and rollover are similar, but there are subtle differences. Do a search and you'll find more info on that.