Author Topic: Where to Put HSA  (Read 1188 times)

quelinda

  • Stubble
  • **
  • Posts: 111
Where to Put HSA
« on: January 22, 2017, 06:32:07 AM »
My husband has an HSA through his employer (I'm a SAHM). So far it's just in a savings account, and we decided this year not to touch it but use it as another retirement savings vehicle. The balance is about $4000 but we'll have over $10,000 by the end of the year.

His 401K (our only other investment) is 100% in a Vanguard U.S. large cap stock index fund (VINIX). The balance is only about $218,000 but just this year he started contributing the max ($24,000 since he's over 50). We should be on track for him to retire in ten years.

In light of that, I'm wondering if we should keep the HSA in the savings account or something similarly "safe." Any thoughts or advice? Thanks!

Spork

  • Walrus Stache
  • *******
  • Posts: 5747
    • Spork In The Eye
Re: Where to Put HSA
« Reply #1 on: January 22, 2017, 07:17:30 AM »
How are you planning to use it?

* every time you have a medical expense, reimburse yourself.
* every time you have a medical expense, you keep record of it and leave the HSA alone for compounding interest growth.  (Then draw a large amount at a date far in the future.)

The first method implies (to me) "savings account".  The second implies "index funds."  But I am sure there are other factors here like how often you incur expenses, etc.

quelinda

  • Stubble
  • **
  • Posts: 111
Re: Where to Put HSA
« Reply #2 on: January 22, 2017, 08:21:08 AM »
How are you planning to use it?

* every time you have a medical expense, reimburse yourself.
* every time you have a medical expense, you keep record of it and leave the HSA alone for compounding interest growth.  (Then draw a large amount at a date far in the future.)

The first method implies (to me) "savings account".  The second implies "index funds."  But I am sure there are other factors here like how often you incur expenses, etc.

We would use it the second way. Thanks for chiming in!

Indexer

  • Handlebar Stache
  • *****
  • Posts: 1463
Re: Where to Put HSA
« Reply #3 on: January 22, 2017, 08:50:55 AM »
Based on this the HSA should be invested the same way as your other retirement money.

I think what you actually need to do is create an investment plan. Once you have that figuring out how to invest the HSA and 401(k) will be easy. Side note: not sure you should be 100% large cap US stocks in the 401(k), but you might have already considered that.

Investment plan links: https://www.bogleheads.org/forum/viewtopic.php?f=1&t=6211
« Last Edit: January 22, 2017, 08:52:41 AM by Indexer »