HSA (Health Savings Account) strategy questions

[SquarePeg]

I've been lurking this forum for a while and have learned a lot, so thanks! I've got what are probably some basic-level questions, but I haven't seen any threads covering them in the last few months, so here they are...

I've read a fair amount about HSAs (Health Savings Accounts) and until recently felt like I had a good handle on the best way to use them. A couple years ago I selected the high-deductible health plan, which came with the HSA. This year I'm maxing out my contributions and taking advantage of the contributions my employer offers through their workplace wellness program.

Investing: The interest rates offered on cash by my HSA provider (Health Equity) would best be described as pathetic. It's a schedule ranging from 0.01% (yes, one one-hundredth of a percent) for the first $2000, all the way up to a "whopping" 0.36% on money over $10,000.

Until now, my plan has been to keep an amount equal to my yearly health insurance out of pocket maximum (around $4000) in "cash" and invest anything over that. Lately I've been feeling like that's leaving money on the table though. I have enough cash in the bank to cover the potential $4000 if I needed to, so should I be more aggressive with my HSA "asset allocation"? What cash/investment split do you use?

Fund choice: Health Equity is offering a number of Vanguard funds with expense ratios ranging from 0.02% (VIIIX) to 0.16% (VWAIX). What is a good strategy here for selecting the funds to use? Should I try to do the "same" as my 403(b) (all in a Vanguard Target-Date fund, currently running at 85% stocks/15% bonds)? I could piece that together in Health Equity by using VIIIX for the stocks and VBMPX (or maybe VTAPX?) for bonds. Or should I "diversify" and try to select funds to complement my "big" retirement account's asset allocation? If so, what would make sense there?

Utilization: I've read some articles that advocate not using the HSA funds to pay for medical expenses as they come up. Instead, they say to save the "receipts" until "later" (I'm not sure when "later" would be exactly) and let the HSA grow. Then, when the time is right, you can reimburse yourself for those expenses, and do whatever you want with the money.

For some reason I feel a little uncomfortable with this... For one, it seems like going against the reason the HSA exists. It also seems like kind of a hassle to do the record-keeping, etc. But if it's worth enough money to me I'm willing to consider it. The questions(s) here are: how much am I potentially leaving on the table if I just pay my modest medical expenses from the HSA as I go vs. paying out of pocket and letting the HSA grow? What approach do you use with your HSA?

Cash interest "enhanced rates" option: When I was digging on the Health Equity website about this stuff, I found an option for a "cash supplement" agreement, which would increase the interest earned on the cash portion of my HSA balance. The increase would basically double the normal rates. The way this is described is:

This option is an interest-bearing group annuity contract issued by Pacific Life Insurance Company that offers enhanced rates. Rates subject to change. Guarantees subject to claims-paying ability of insurer.

Looking at the fine print, I found this:

4 - NO FEDERAL INSURANCE. YOUR CASH ACCOUNT AND THE CONTRACT WILL NOT
BE FEDERALLY INSURED (E.G., BY THE FDIC). THE CONTRACT IS SUBJECT TO THE
CREDIT RISK OF PACIFIC LIFE AND MAY RESULT IN A LOSS OF THE PRINCIPAL AND
ACCRUED INTEREST IN YOUR CASH ACCOUNT.

So, for a very limited upside (i.e., two times pathetic is still pathetic), it sounds like I'm risking my principal? If that's the case, wouldn't I be better going with the investing option, which also offers the chance of principal loss, but has a much greater upside? How risky are offerings like this? Does anyone out there take advantage of them?

That's a lot of questions but I appreciate any info or insights offered. Let me know if I can provide any additional details about my situation or the options at Health Equity. Thanks!

[omachi]

So, first of all, funds put into your HSA will save you on taxes beyond just a 401k, as Social Security and Medicare taxes aren't deducted from funds that get put in an HSA. Beyond getting a company match in the 401k, money in an HSA is better because of this, provided you have reasonable investment options.

VIIIX is essentially VFIAX with better fees, tracking the S&P 500. There's not a ton of difference between these and another favorite, VTSAX, which rounds out the broader market. But being market cap weighted, it's pretty similar to the others.

The big question is what does your investment plan and asset allocation say you should do? An HSA is effectively a 401k/IRA that has less taken out in taxes from the funding dollars and better access. You can either reimburse yourself for qualified medical expenses or you can treat it like a retirement account that you'll have access to later with the usual taxes for taking money out. Because of this, it's better than the typical retirement accounts. Minus Roth conversions, but chances are you have enough in other accounts that this isn't an issue.

You note discomfort, but I'm not sure why. The account is defined as the account is defined. Use it how you want. If you can cashflow medical expenses now, you'll be able to reimburse yourself for them later tax free, while having also made gains on them in a tax deferred account. If you just want to pay medical expenses now, that's cool too. You get to pay them with money that's been exposed to very little taxation. What's best for you will depend on your tax bracket, future tax bracket, and whether you need to bridge any gaps between when you retire and when you can draw on retirement accounts. Which is to say it's complicated.

Personally, I cashflow expenses now and plan to reimburse myself for them later. I'll do so between early retirement and having full access to my deferred tax retirement accounts. The ability to grab thousands of dollars (that I paid out of pocket for medical expenses previously) tax free in a given year if I need it without bumping my income up is very attractive and makes paying for medical expenses with post-tax dollars worthwhile. So my "later" is sometime during early retirement. After full retirement age is also common, as the gains can be used for medical expenses tax free as well. Contribute early, use late, as needed.

Unless you're using it for heavy current medical expenses, there's very little reason to leave the money in cash in the HSA. Much like leaving money in a cash or money market fund in a 401k isn't a great idea. Think of the HSA as a retirement account with tax-free medical reimbursement benefits.

[MDM]

Might be worth reading the Health savings account - Bogleheads wiki article, particularly the How to use the plan section.

Fidelity may be the best HSA provider these days (see HSA custodians and options).  You may transfer your funds from Health Equity to Fidelity if you wish.

[Asalted_Nut]

My employer deposits into Health Equity. If you plan on investing, you may be better off going with what MDM says and doing a partial transfer to Fidelity. There is a digital form on HealthEquity you can use for the partial transfer, takes about 3 or so weeks to go through.

You can do these partial transfers as frequently as you'd like, vs a rollover (you pull the cash out, then deposit it yourself into another HSA) can only be done once. There is no fee for partial transfers, however you are required to keep a minimum of $25 in your HealthEquity account. I typically do them monthly when the deposit hits the account, but I've seen others mention doing them less frequently.

There are two reasons I would recommend going with a Fidelity HSA (or I hear good things about "Lively", but don't know much about it), since you are talking about investing the funds, but this is without knowing the $ amount particulars or what would work best for you:

1. If you keep your funds with Health Equity, there is a minimum amount that must be held as cash. I believe it was 2,000 last I checked, they may have changed it since then. So you need to have 2k in cash, and then anything above that can be invested with HealthEquity.
2. Fees; A Fidelity HSA is zero cost outside of fund expense ratios, and if you invest in their zero-cost mutual funds then it is entirely zero-cost. HealthEquity, if you decide to invest, has the following which is added on top of any mutual fund expense ratios (which should be negligible, given they are mostly Vanguard Institutional funds that carry extremely low expense ratios):
Investor Choice fee: 0.36% per year on invested assets

Hope this is at all helpful! :)

[PeterParker]

I'm pretty seasoned at HSAs.
To review high level:

1. There's an annual contribution limit: $3600 or so.
2. It's completely tax free, period, when used for medical expenses (including dental or vision, although not premiums).
3. At age .... 59? 65? ... something? .... it can be used for anything as a tIRA at worst.

When it comes to HSA custodian, you can:

1. Roll you own. Fidelity zero fund sure. Though there are always hidden expense ratios baked in. I look at minimum threshold for investment. Fidelity you can invest it all, for free.
2. Employer cafeteria plan, pre-payroll tax, to whatever their custodian is.
3. Both, of course!

I store my old HSA funds in Fidelity, and do all current funding via pre-payroll employer custodian. Why? A. It simplifies taxes. B. Better cashflow avoiding taxes upfront. C. You avoid FICA -- true, you will have less contribution to "social security" making it a wash generally come retirement time, but social security may not exist when I retire -- who knows!

At first, I was tempted to liquidate my health savings as I accrued expenses. Now, I don't.

1. No need to spend a dime until you have $10k-$20k in your HSA. You don't think you'll see those expenses in the rest of your life? You're dreaming.
2. Technically the HSA funds can be used for a retirement home at some point in the future. In case of emergency.
3. Personally, I think even $36k would be fairly easy to burn through in retirement medical expenses (including dental and vision). And that'll be 10 years of max saving.
4. If you're really pressed, just save the "big ticket" medical expenses as receipts, as there is no time limit when to "redeem" them.

Hope that helps.

Just think of it this way. The LAST bucket of money/ investments you want to be touching is a pool that is completely tax free.

[seattlecyclone]

Utilization: I've read some articles that advocate not using the HSA funds to pay for medical expenses as they come up. Instead, they say to save the "receipts" until "later" (I'm not sure when "later" would be exactly) and let the HSA grow. Then, when the time is right, you can reimburse yourself for those expenses, and do whatever you want with the money.

For some reason I feel a little uncomfortable with this... For one, it seems like going against the reason the HSA exists. It also seems like kind of a hassle to do the record-keeping, etc. But if it's worth enough money to me I'm willing to consider it. The questions(s) here are: how much am I potentially leaving on the table if I just pay my modest medical expenses from the HSA as I go vs. paying out of pocket and letting the HSA grow? What approach do you use with your HSA?

Letting the HSA grow can be valuable in the long run.

Let's suppose you have a very predictable $2,000 of medical bills every year. You have a choice between
* Option 1: spending $2,000 from your checking account (and investing $2,000 of new HSA money), or
* Option 2: spending $2,000 from the HSA immediately (and investing $2,000 in a taxable account),
Suppose that whatever funds you invest will increase in value by 5% every year.

After ten years you will have about $26,000 in one type of account or another. If you pick Option 1 (and save your receipts), you'll have $26,000 in your HSA, of which you can take out $20,000 for free whenever you like, and $6,000 to spend on future medical expenses (again for free). If you pick Option 2, you'll have $26,000 in your taxable account, and when you want to spend it you'll need to pay capital gains tax on the $6,000 of growth. Plus in every intervening year your taxable investment will probably pay some dividends that you have to pay tax on as you go.

The difference over a year or two is minimal, but the gap widens a bit every year, and if you make a habit of picking Option 1 throughout your career it can make a pretty big difference by the time you retire.

As to the question of when "later" is, my general approach is to spend down taxable investments first during FIRE, and then start pulling from the HSA once those are gone. This can be a very individual thing though.

[achvfi]

I was one of those receipt savers. Its a wonderful strategy.

Over many years I have been fully contributing to HSA and investing  almost all of my HSA contributions, I accumulated about 90 grand, almost 40% of it is just the growth.

After doing it for years, I noticed myself loosing interest in meticulously documenting and saving receipts. Not excited about doing it anymore.

So I chose to reimburse myself for many years of expenses and simplify my future tax strategy by investing in improving current cashflow and funding MBR approaches with the gains from HSA.

Some of us change over time significantly on what we value.

[Niceday]

Regarding saving receipts, you don't really need to save a physical copy of the receipts. You can just put a line item for each medical expense on a spreadsheet. I use a Google Sheet so it's always readily available.

[sonofsven]

I use Lively as my HSA provider. I generally deposit $300 per month; I'm self employed so no employer match, and I can put in $3,600 per year (over fifty).
Lively has no fees to open the account, no fees yearly, no fees at all.
It takes a few days for the deposit to show up in my Lively account; when it posts I transfer it to my linked TD Ameritrade account.
TD Ameritrade is the investment partner to Lively and there's also no fees on this account. I buy Vanguard VTI etf and there is no fee for this purchase, either.
My Lively balance is generally $0 as I invest all of it into VTI.

[SquarePeg]

Thanks very much to all who took the time to respond. I've got a bunch of stuff to research this weekend! I'll definitely be looking into the Health Equity to Fidelity pipeline, that sounds promising.

[BZB]

@SquarePeg I'm glad you posted this! I just started my HSA and it is also Health Equity, so I'm grappling with the same questions. Very helpful!

[MustacheAndaHalf]

After leaving my prior employer, I picked "HSA Bank" as my provider.  If I get the motivation at some point, I might try migrating to Fidelity HSA to reduce/eliminate the fees I'm paying.

Note you might do better paying fees than not, if you get better returns overall.  If I left $1000 in cash, I wouldn't pay monthly fees.  But for $30/year (3% of $1000), I can invest my last $1000 in the stock market.  Historical evidence suggests I'll do much better than 3% in the market, and come out ahead paying fees.  If you aren't taking withdrawals from your HSA any time soon, try and get a plan where everything can go into investments.

[Niceday]

In case this is not clear, Fidelity has no fees and they allow you to invest all your HSA cash.

[JoePublic3.14]

We’ve been maxing out our HSA for a bunch of years, and have no intention of pulling a penny out until much later.

Our records are two folders. Good activity for the first year of retirement, sort things out.

[pdxvandal]

^^^Fidelity 100%. I moved all my employer HSA funds to there last year. Zero or minimal fees on everything. I'll move the remainder from HSA Bank to Fidelity when I FIRE in 2022 or 2023.

[seattlecyclone]

I'll second the recommendation for Fidelity. As far as I know it's just them and Lively offering the no-fee HSAs where you can invest the balance. Lively got there first. My wife moved her account to Lively before Fidelity got into the game. I put mine in Fidelity. Both providers are just fine, but I recommend Fidelity for two reasons. First, they're much bigger and I have more faith they'll still be around offering a good HSA product in a decade. Secondly, I like their website better.

[Just_Me]

After leaving my prior employer, I picked "HSA Bank" as my provider.  If I get the motivation at some point, I might try migrating to Fidelity HSA to reduce/eliminate the fees I'm paying.

Note you might do better paying fees than not, if you get better returns overall.  If I left $1000 in cash, I wouldn't pay monthly fees.  But for $30/year (3% of $1000), I can invest my last $1000 in the stock market.  Historical evidence suggests I'll do much better than 3% in the market, and come out ahead paying fees.  If you aren't taking withdrawals from your HSA any time soon, try and get a plan where everything can go into investments.

I have HSA Bank and when I was dealing with the $1000 issue, I just lowered cash reserves by $1000 and invested in taxable. Not quite the same, but I figured good enough.

For some strange reason the scenario was different because with the Fed HDHP plan I have we literally could not transfer out the 1000 and pay the fees. I guess the plan provider on the hook for fees etc was not willing to pay them so they just left the limit there. Now there is no limit and we can transfer out 100% no fees.

I'm not sure what I would have done if there were fees.

[TeeNixx]

PTF

[Dicey]

Regarding saving receipts, you don't really need to save a physical copy of the receipts. You can just put a line item for each medical expense on a spreadsheet. I use a Google Sheet so it's always readily available.

You sure about that? I've always read you should store your actual receipts carefully and keep electronic copies in case they fade or get lost or destroyed. They are like cash or gift cards and deserve/require special care.

[MustacheAndaHalf]

Regarding saving receipts, you don't really need to save a physical copy of the receipts. You can just put a line item for each medical expense on a spreadsheet. I use a Google Sheet so it's always readily available.

You sure about that? I've always read you should store your actual receipts carefully and keep electronic copies in case they fade or get lost or destroyed. They are like cash or gift cards and deserve/require special care.

I had the same impression as Dicey, and found evidence for it on irs.gov :

"The CARES Act also modifies the rules that apply to various tax-advantaged accounts (HSAs, Archer MSAs, Health FSAs, and HRAs) ... "
"Taxpayers should save receipts of their purchases for their records and so that they are able to submit claims for reimbursements."
https://www.irs.gov/newsroom/irs-outlines-changes-to-health-care-spending-available-under-cares-act

[Just_Me]

Regarding saving receipts, you don't really need to save a physical copy of the receipts. You can just put a line item for each medical expense on a spreadsheet. I use a Google Sheet so it's always readily available.

You sure about that? I've always read you should store your actual receipts carefully and keep electronic copies in case they fade or get lost or destroyed. They are like cash or gift cards and deserve/require special care.

I had the same impression as Dicey, and found evidence for it on irs.gov :

"The CARES Act also modifies the rules that apply to various tax-advantaged accounts (HSAs, Archer MSAs, Health FSAs, and HRAs) ... "
"Taxpayers should save receipts of their purchases for their records and so that they are able to submit claims for reimbursements."
https://www.irs.gov/newsroom/irs-outlines-changes-to-health-care-spending-available-under-cares-act

I must be blind because I don't see that text there.

Most of my plan has to save copies of the EOBs I receive because they are easier for me to track than the receipts. A lot of HSA carriers promote this as an alternative to receipts (genre "keep copies of receipts or EOBs"). Is this faulty?

[Niceday]

Regarding saving receipts, you don't really need to save a physical copy of the receipts. You can just put a line item for each medical expense on a spreadsheet. I use a Google Sheet so it's always readily available.

You sure about that? I've always read you should store your actual receipts carefully and keep electronic copies in case they fade or get lost or destroyed. They are like cash or gift cards and deserve/require special care.

I had the same impression as Dicey, and found evidence for it on irs.gov :

"The CARES Act also modifies the rules that apply to various tax-advantaged accounts (HSAs, Archer MSAs, Health FSAs, and HRAs) ... "
"Taxpayers should save receipts of their purchases for their records and so that they are able to submit claims for reimbursements."
https://www.irs.gov/newsroom/irs-outlines-changes-to-health-care-spending-available-under-cares-act

At my last job, we had a discussion group that talked about financial matters and this was one of the topics. But please verify this with your accountant or IRS to be sure.  Also, a quick search got me this link: https://flexreserve.custhelp.com/app/answers/detail/a_id/37790/~/health-savings-account-record-keeping%3A-receipts-and-hsas

[SquarePeg]

Hi all, I thought I'd follow up with some updates and a question or two, for those who are interested. In the order of questions from the OP:

Investing: The mentions of opening a new HSA at Fidelity interested me, so I looked into it, and ended up going ahead and doing it. As people said upthread, it hasn't cost me anything (and looks like it won't, as far as I can tell) and I have my employer-sponsored retirement account there already, so it was kind of a no-brainer.

What I decided to do was leave about $2000 in cash at Health Equity, as kind of a "just in case" pot of funds for health care expenses. I sent $5000 over to Fidelity, and am going to aim for a 90/10 stock/bond fund ratio there. I started by sending $4500 to FXROX (Fidelity ZERO Total Market Index Fund) and $500 to FXNAX (Fidelity U.S. Bond Index Fund).

My provisional plan going forward is to transfer $900 to $1000 or so from Health Equity to Fidelity on a quarterly basis (leaving the cash balance at Health Equity approximately the same over time, given the $3650 max contribution for 2022). When the funds arrive at Fidelity, buy into the two index funds listed above.

Question: To maintain that 90/10 asset allocation, in the event that one fund outperforms the other (seems likely on average that the stock fund will grow more than the bond fund) should I adjust the "buy" amounts to the two funds to try to get back to 90/10? Or should I "rebalance" on a longer schedule, like once a year?

Fund choice: This question was mainly about "target date" funds vs. "manually selected" individual funds. As mentioned above, I went with a manual selection.

Question: As I've been investigating the various target date fund offerings at different places, it occurred to me that, if my goal is to retire significantly before a "normal" retirement date, the timing of the asset allocation changes in those funds might not be a good match with my plans. This is getting a little far afield of the point of this thread (HSAs), but what do folks think about target date funds vs. roll-your-own portfolios? To avoid a big derail, if there's a good resource/thread/site that goes into it, I'd love a pointer.

Utilization: After the getting reinforcement in this thread of the wisdom of trying not to use HSA funds in the short term, I've decided to try to not use the HSA funds if I can avoid it. That's subject to change though, if necessary, and I left a small cash cushion in my Health Equity account to handle small-to-medium expenses if for some reason I can't cover them with my bank account cash savings.

Cash interest "enhanced rates" option: Nobody had anything to say about this, but since I intend to only have $2000 or so in "cash" at Health Equity, I've decided it's not worth the extra complication for the additional two cents a month in interest.

Random notes:

• Through a combination of my ignorance/unfamiliarity with the process and some less-than-ideal web interface design, I accidentally opened two HSAs at Fidelity. I opened the second one because after I completed the process for the first one, I looked at my account "dashboard" and the new account wasn't showing. I figured (incorrectly) that I had not completed the process correctly so went through it again. Oops! Just a note to be patient to anybody who might be planning to open an HSA at Fidelity.
• Upthread someone mentioned that they transfer funds from Health Equity to Fidelity via a Health Equity form that is completed and mailed to them. I found that you can also initiate the transfer on the Fidelity side, and it's available as a purely online process, so no printing and mailing necessary. It did still take about a month from the time I put in the transfer request to having funds in my Fidelity HSA ready to invest. (This includes a white-knuckle week or so where the funds were gone from Health Equity but not showing up at Fidelity... Not sure if that's normal, it did include Thanksgiving, but I was very close to contacting customer service about it.)
  

Anyway, thanks again for the advice upthread and any new thoughts about what I'm up to. Also hope that relating my experience so far has some value for other people who are looking into some of the same questions.

[Dicey]

Why 90/10? It seems like you could consider the Health Equity chunk your "bonds" for stability and put everything at Fidelity in FXROX.

[talltexan]

Just log in 1ce a quarter, put the new money in so as to get closer to your target allocation. Make it as simple as possible so you don't have to spend mental space on this.

[Fire2025]

Once you turn 65 you can use HSA funds to reimburse yourself for Medicare plan B and D premiums, but not medicare supplemental policies. 

I plan to let all my HSA money ride and use it for health care expenses after age 65.  But I'm old so that's not that long of a ride for me :-)

[SquarePeg]

Why 90/10? It seems like you could consider the Health Equity chunk your "bonds" for stability and put everything at Fidelity in FXROX.

That's a fair question and something I had thought of as well. I figured, since I'm keeping the amount of cash at Health Equity constant, as the balances at Fidelity grow over time, the $2000 amount will become a smaller and smaller fraction of the total.

Plus going from having a nice chunk of cash in my HSA ready to go to having 100% in the stock market feels like a big jump for me, so this approach is a nice transition/glidepath that helps me feel more comfortable.

Makes sense to me, but if you have a different take I'm all ears.

[sonofsven]

Why 90/10? It seems like you could consider the Health Equity chunk your "bonds" for stability and put everything at Fidelity in FXROX.

That's a fair question and something I had thought of as well. I figured, since I'm keeping the amount of cash at Health Equity constant, as the balances at Fidelity grow over time, the $2000 amount will become a smaller and smaller fraction of the total.

Plus going from having a nice chunk of cash in my HSA ready to go to having 100% in the stock market feels like a big jump for me, so this approach is a nice transition/glidepath that helps me feel more comfortable.

Makes sense to me, but if you have a different take I'm all ears.

I think it's fine to do that, especially if it makes you comfortable. I don't even think of my HSA as a fund to pay for daily medical expenses, I never saw the point. It's more of an emergency fund that supplements my high deductible insurance; a catastrophic plan, basically.  I have an emergency fund of cash available, so after moving funds back from VTI to my HSA I would be re-imbursing my own cash emergency fund, if needed.


The HSA has the benefits of the tIRA and the Roth. Tax write off and tax free growth. I put all mine in VTI and am letting it grow.

[talltexan]

Why 90/10? It seems like you could consider the Health Equity chunk your "bonds" for stability and put everything at Fidelity in FXROX.

That's a fair question and something I had thought of as well. I figured, since I'm keeping the amount of cash at Health Equity constant, as the balances at Fidelity grow over time, the $2000 amount will become a smaller and smaller fraction of the total.

Plus going from having a nice chunk of cash in my HSA ready to go to having 100% in the stock market feels like a big jump for me, so this approach is a nice transition/glidepath that helps me feel more comfortable.

Makes sense to me, but if you have a different take I'm all ears.

Throwing a lever and going to 100% stocks sounds like a big jump, and you may not be up to it psychologically.

Neither am I.

So I'm just making myself raise the allocation every quarter in mine. I have four equity ETF's (roughly they're a REIT, domestic and internationl Small Cap, and SP500), and I just make sure to "rebalance" by increasing the three stragglers up to the value of the highest of the four each time I log in. Baby-steps.

[Dicey]

Why 90/10? It seems like you could consider the Health Equity chunk your "bonds" for stability and put everything at Fidelity in FXROX.

That's a fair question and something I had thought of as well. I figured, since I'm keeping the amount of cash at Health Equity constant, as the balances at Fidelity grow over time, the $2000 amount will become a smaller and smaller fraction of the total.

Plus going from having a nice chunk of cash in my HSA ready to go to having 100% in the stock market feels like a big jump for me, so this approach is a nice transition/glidepath that helps me feel more comfortable.

Makes sense to me, but if you have a different take I'm all ears.

Throwing a lever and going to 100% stocks sounds like a big jump, and you may not be up to it psychologically.

Neither am I.

So I'm just making myself raise the allocation every quarter in mine. I have four equity ETF's (roughly they're a REIT, domestic and internationl Small Cap, and SP500), and I just make sure to "rebalance" by increasing the three stragglers up to the value of the highest of the four each time I log in. Baby-steps.

10% isn't exactly a big jump. Many of us don't count things that act as bonds as bonds. The most obvious examples are mortgages and pensions. I'm FIRE, but in retrospect, counting my mortgage as a bond and putting everything else into equities would have shaved years off the journey. Isn't that what MMM is all about?

[talltexan]

Indeed so many questions to personal finance experts seem to be "I have this huge slug of cash, and I know I want to own risky assets for the long-term, but I'm just not able to handle going into the market right now.