Author Topic: Help with HSA  (Read 546 times)

timj

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Help with HSA
« on: April 01, 2019, 02:47:01 PM »
I'm about to dive hard into the world of HSAs.  I paid off my student loans about a year ago and have built a rainy day fund so I'm looking to invest outside of my 401k.

I would love to utilize an HSA to invest in Index funds like Vanguard does anyone have any recommendations on a solid institution to use without fees?  I missed the deadline for my office cafeteria plan so I have to go rogue for now.

Through a simple google search on Vanguard HSAs the website Healthequity.com came up any thoughts?

Also I'm assuming people are loading up their HSAs then it gets taxed at a rate of 20% for other expenses at retirement age correct?  Can the account balance be gifted or transitioned to my wife or potential kids after death?

I'm sure I'll have more questions as I go.  Thanks in advance!

EvenSteven

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Re: Help with HSA
« Reply #1 on: April 01, 2019, 02:55:06 PM »
Unclear from your post, but the first step would be to make sure you have health insurance that allows you to contribute to an HSA.

Some employers make a contribution to your HSA. Mine for instance contributes $500 per year. Does your work contribute anything? And do they have an HSA provider that they contribute directly through payroll to?

The 2 HSA custodians that I know of that offer zero fee investment options with no requirement for keeping a cash balance are Fidelity and Lively. Both seem good to me. I use Lively because Fidelity didn't offer HSAs when I set mine up. I would probably go with Fidelity if I was starting now just because they are more established, but don't care enough to transfer my account.

timj

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Re: Help with HSA
« Reply #2 on: April 01, 2019, 03:02:42 PM »
Unclear from your post, but the first step would be to make sure you have health insurance that allows you to contribute to an HSA.

Some employers make a contribution to your HSA. Mine for instance contributes $500 per year. Does your work contribute anything? And do they have an HSA provider that they contribute directly through payroll to?

The 2 HSA custodians that I know of that offer zero fee investment options with no requirement for keeping a cash balance are Fidelity and Lively. Both seem good to me. I use Lively because Fidelity didn't offer HSAs when I set mine up. I would probably go with Fidelity if I was starting now just because they are more established, but don't care enough to transfer my account.
Thanks for the reply.  I do have a high deductible insurance plan so I'm good for investing in a HSA.  My work does offer a HSA plan but no match/contribution.  I missed the deadline on it for 2019 so I want to invest in my own plan for this year (and potentially 2018 with the tax deadline coming up).

I will definitely look at both Fidelity and Lively thank you.

cincystache

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Re: Help with HSA
« Reply #3 on: April 07, 2019, 11:28:17 AM »
One other thing to consider. If you go through your employer's HSA provider and they deduct the contributions from your paycheck, the contributions are FICA and medicare tax exempt (7.65%) in addition to your federal income tax exemption status.

Said differently, if you contribute to a plan outside your employers plan, you could be essentially paying a 7.65% fee on your initial contributions, not cool.

This is why I stick with my employer's provider (mybenefitwallet.com). I'm not impressed with them and they charge $5 a month in fees but they have VTSAX and like I said before, my 7,000 annual contribution is not taxed by FICA or medicare which saves me $535 per year in taxes which more than makes up for the $60 in fees per year.



MDM

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Re: Help with HSA
« Reply #4 on: April 07, 2019, 12:21:21 PM »
One other thing to consider. If you go through your employer's HSA provider and they deduct the contributions from your paycheck, the contributions are FICA and medicare tax exempt (7.65%) in addition to your federal income tax exemption status.

Said differently, if you contribute to a plan outside your employers plan, you could be essentially paying a 7.65% fee on your initial contributions, not cool.

This is why I stick with my employer's provider (mybenefitwallet.com). I'm not impressed with them and they charge $5 a month in fees but they have VTSAX and like I said before, my 7,000 annual contribution is not taxed by FICA or medicare which saves me $535 per year in taxes which more than makes up for the $60 in fees per year.
All good points.

You could further transfer the money from the employer's provider to Fidelity or Lively or whomever and get both the FICA savings and excellent low fee investment choices.