Hsa

[Atretes1]

HSA what would you do?

Minimum threshold to invest is $2000. There is a $2 monthly fee if the HSA is under $3000. Invested funds to not count towards the 2k or 3k minimum. Do I invest the the $1000 or leave it in the interest bearing part to save the monthly fee? Interest bearing part pays crap for interest.

Side note my HSA will be a savings account which will not be used until retirement. All excess funds will be in the market.

[kork13]

In this case, look at it in terms of real dollars. $24/yr saved from the sidelining of $3k. Regardless of which way you go, it's small beans. This is not a mathematical question, but an emotional one. So I'd argue that you make an emotional decision. Do what feels right. If the fee really bothers you, then let the money sit. If you can't stomach letting the money sit idle, accept the fee. Either way, you'll be fine. The fact that you're even evaluating this carefully indicates that you're on the right track, and I'm confident that you'll be successful.

For what it's worth, I'd park the money to save the fee, and move on with my life.

[disneysteve]

Are you saying that if you have $3,000 in your HSA and choose to invest it, they'll hit you with a $2/month charge and the only way to avoid the charge is to keep the money in an account paying essentially nothing? If so what a lousy plan.

That said, $24/year on $3,000 is 0.8%. That's a lot but that $24 is fixed (unless they change it) so the percentage that fee represents will steadily decrease as your HSA balance increases. I'd go ahead and invest. Even a modest return of 4 or 5% will more than offset the 0.8% fee you're paying.

[Atretes1]

I have to leave $2000 un-invested no matter what If I leave 3000 un-invested I am not charged the $2 monthly fee.

[cypher1]

I have to leave $2000 un-invested no matter what If I leave 3000 un-invested I am not charged the $2 monthly fee.

Are you spending the majority of your contributions throughout the year? If so, you may want to hold off on investing.

I understand the triple tax advantages with HSA, but I've always viewed HSA as medical expenses first, and investments second. So like others have said, its really your call on how comfortable you are with spending $24 per year in fees.

For the first few years, I just kept saving my amount, as I was paranoid of some medical surprise. I only started recently maxing and investing in the last 14 months when I had about 7000 to work with . My HSA just changed services, and I need to keep a minimum of 1000 in the account (I keep 1500-2000 to cover the deductible or for an ER surprise), before I invest the remaining amount (no fees that I'm aware of).

[disneysteve]

I have to leave $2000 un-invested no matter what If I leave 3000 un-invested I am not charged the $2 monthly fee.

That sucks. No, I wouldn't pay $2/month to invest $1,000. That's a 2.4% fee - not worth it. I'd wait until you build up a larger balance so that the fee takes a smaller cut.

[scfr]

Do you have the option of looking for a different HSA?
Are you able to contribute more to the HSA this year?
Do you plan to continue contributing to this HSA in the future?

[Atretes1]

Are you spending the majority of your contributions throughout the year? If so, you may want to hold off on investing.

I understand the triple tax advantages with HSA, but I've always viewed HSA as medical expenses first, and investments second. So like others have said, its really your call on how comfortable you are with spending $24 per year in fees.

For the first few years, I just kept saving my amount, as I was paranoid of some medical surprise. I only started recently maxing and investing in the last 14 months when I had about 7000 to work with . My HSA just changed services, and I need to keep a minimum of 1000 in the account (I keep 1500-2000 to cover the deductible or for an ER surprise), before I invest the remaining amount (no fees that I'm aware of).

I am going to max out my HSA every year. I am not going to spend it at all. If i have medical cost through out the year which are low anyway I will cash flow them. My HSA will be used in 12 years at 55 when I retire early for health insurance premiums probably.

Do you have the option of looking for a different HSA?
Are you able to contribute more to the HSA this year?
Do you plan to continue contributing to this HSA in the future?

This HSA is from my job I do not believe I have a choice if I want the tax savings from my paycheck. I plan on maxing it out every year and not using it until retirement.

[Atretes1]

When I invest the funds I can choose Vanguard funds however, the investment account has a Management fee of 0.0300% of your average daily investment balance, not to exceed $10.00 in any given month. I am not sure how that rates with all the others.

[amarowsky]

Agreed with the gang above. Mite as well wait until you have a nice slug of money in there to invest. I was in the same position in 2016 when I had started @ my old job...

Not sure what your deductible is. But if I recall my deductible/max out of pocket (MOOP) = $3100/6800.

We would set up our account @ first to account for @ least the deductible. And after that we “Tried” to move ours to sit @ $7000 minimum, and everything else invested. But “Life” happened in two ways. One premeditated, and the other a freak accident. So we had to use a healthy chunk.

The point being. I think it is wise to keep enough to cover the MOOP or @ least the deductible. Investing the surplus from the MOOP would be best. (*I resigned from my job about 3 weeks ago, and am not working full time. So we jumped to my wife’s benefit plan, and our deductible is actually lower than it used to be (and our MOOP is like 5k max now) so we can get back to investing in ours.

HSA’s open up @ 65 right? (*I’m pretty sure that is the date, that they become un-earmarked for medical costs only, and can be used as a typical retirement account). So it is expected that this account could take a little longer to build up steam.

[Atretes1]

HSA’s open up @ 65 right? (*I’m pretty sure that is the date, that they become un-earmarked for medical costs only, and can be used as a typical retirement account). So it is expected that this account could take a little longer to build up steam.

You are right it opens up at 65 for non medical. I plan on using it at 55 for health insurance premiums when I retire.