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HSA Recommendations?

Discussion in 'Investments and Savings' started by Daniel, Apr 29, 2015.

  1. Matt

    Matt Administrator Staff Member

    Doesn't the Roth mean you take the $300 out of the ecosystem today, depriving it of compound growth for the period between contribution and distribution?
  2. redbirdsj

    redbirdsj Level 2 Member

    Yes, but it also means you get tax-free growth and distributions on the principal. As in Andy's example, the portfolio values are equal assuming all income is taxed at the same marginal rate.
  3. Matt

    Matt Administrator Staff Member

    Will have to think about it and run the numbers when more awake :)
  4. sriki

    sriki Level 2 Member

  5. redbirdsj

    redbirdsj Level 2 Member

    Unless you're a major geek like me, I'd advise not thinking about this stuff prior to coffee.
  6. raenye

    raenye Lever 2 Membel

    I like to think about it as "either put $5,500 in Roth or put $5,500 in Traditional and the saved taxes on these $5,500 in a taxable account, with which you intend to pay the tax bill later on".
  7. haserfauld

    haserfauld Level 2 Member

    Dragging up this thread, but I'm finally switching to an HDHP as of June 1. My employer does not administer an HSA, so I've been looking up different banks/administrators. I'm liking Alliant CU (mentioned upthread). My balances will not likely exceed $2K for the next year or so, as I'm not yet maxing out my 401k contributions and will focus extra income there, aside from expected medical expenses. Any recommendations other than Alliant CU?
  8. Craig

    Craig Level 2 Member

    I currently have my HSA at Benefit Wallet as a relic of a previous employer. Automatic contributions are easy, and there is a good choice of funds (VTSMX among others) to invest in.

    I am trying to decide whether to keep the money there or move it. Monthly fee is $3, and I max out every year. Currently about $12,000 in there. Anyone have any experience with this company?
  9. Stuck in KC

    Stuck in KC Level 2 Member

    Mine is united MO bank. Above 4K there is no monthly fee and the interest is better than a local CD. I'm at about 25K and just let it sit as an emergency fund, or maybe for a new Tesla.
  10. kidooo

    kidooo Level 2 Member

    Last edited: May 31, 2016
  11. Cliffbar

    Cliffbar Level 2 Member

    I've struggled to find a good and updated comparison of custodians, and I think a lot of it depends on your personal situation (e.g. minimum balance, how much you want to keep in cash, if you're going to contribute regularly versus a one-time lump sum, if you're using it primarily for long-term investing etc.). But perhaps you'll find this list from Bogleheads helpful. HSA Bank seems to be quite popular generally.
  12. cdancer20

    cdancer20 Level 2 Member

    Fyi, Alliant membership is open to anyone. I think you just have to open a Savings Accounts like other credit unions. Sometimes they have promos to open new accounts. I don't believe there is a hard pull to open it. Pretty great rates though for their checking and savings accounts, 0.65% and 1.0% respectively.
  13. kidooo

    kidooo Level 2 Member

    I am looking for no account fee and option to invest

    You need to be eligible for that as well (though you can get away with a $10 donation)
  14. haserfauld

    haserfauld Level 2 Member

    Technically, you can get away saying you donated (click "I already donated.")
  15. kidooo

    kidooo Level 2 Member

    I see what you did there
  16. cdancer20

    cdancer20 Level 2 Member

    That's still open to anyone. Anyone can make the donation. You will more than make back that $10 donation though if you put money into the accounts, especially savings. Like I said though, sometimes there are promos so you make money for opening the account. I do like haserfauld's idea though. LOL.
  17. kidooo

    kidooo Level 2 Member

    If both me and my wife have a a family HDHP, can I open on HSA account and contribute the total allowed for a family, or do I need to open one HSA for me and on for her?
  18. haserfauld

    haserfauld Level 2 Member

    Along a similar vein to the above question:

    My employer (smaller business) messed up this year and none of our plans are HDHP / HSA eligible. My wife (who is 23) is covered by her parents' plan, since her dad's company has one rate for individual and one rate for family, so since he has his wife on there, it's the same cost to include my wife as well (at least while she's <26). Here's my question: His plan is HSA eligible, and he has one. Is my wife eligible to open one as a dependent on his insurance (not a dependent on his taxes, obviously)?
  19. ldfernald

    ldfernald Level 2 Member

    Work is offering a HSA-Qualified Deductible HMO this year. Looking at setting up a HSA account with an investing option. BOA uses Devenir, TD uses ameritrade. Anyone have an account with either? None waive the monthly fees
  20. Matt

    Matt Administrator Staff Member

    I work with TD on the institutional side, they have a basket of etfs that are fee free for consumers... not sure if you can access them within the HSA but if so there are some low cost options in there.
  21. Ethan

    Ethan Level 2 Member

    I'm trying to understand the best way to maximize my savings plan. My employer has a 401(a) plan to which 5% of my pre-tax pay goes. This year I maxed out a combination of Roth and Traditional accounts. I also have an HSA through my employer. The employer contributes $1500 each year, I'm trying to decide if it makes sense to max out my contributions to that account. I'm working on rebuilding my emergency fund. My employer also has a pension plan that they contribute to, but I need to make 10 years to be vested in it. (I'm at about 1.5 years). For maximizing savings, should I contribute the maximum amount to the HSA? I'm also considering returning to school at some point, so would like to allow access to money for that. Thanks!
  22. Matt

    Matt Administrator Staff Member

    Hard to say with any certainty without seeing the fuller picture, but some high level thoughts:

    If your current salary is high enough then Traditional IRA and 401(k) and HSA are good. For me, it is a no brainer at 25% bracket, and a 'perhaps' at 15% bracket. I would personally contribute to the HSA in full before looking to fill the IRA bucket, assuming you've got a solid amount in 401(k) and IRAs already.

    You should double check on the pension, ERISA gives 5yr cliffs or 3-7 stepped, 10 is non ERISA, which can exist, but are rarer. I'd make sure you don't qualify for something at 5yrs or so before you quit.

    I would not keep an emergency fund now, I would put that into the IRA, using a Roth for the emergency fund. If you get serious about school, then you can save an amount to cover that, but that isn't an 'emergency fund'.
  23. dukerau

    dukerau Level 2 Member

    I did a quick Google search and several websites advised that if an adult child is not a dependent (tax-wise) but is still on a family HDHP, they can open their own HSA and can contribute the family limit. Quite a nice loophole. This aligns with my novice reading of IRS publication 969 which states
    The last one is the important one for you, but it's pretty clear that they intend tax dependency to be different from insurance dependency. Also, the IRS clarifies later in the document that you can't be eligible to be claimed by someone else in order to have an HSA. So if your wife is eligible to be claimed by her parents, even if she isn't, she can't have an HSA. Unlikely for you, but important to point out.

    Fun reading:
    Note: I am not a tax expert and am just pointing you in the right direction
  24. Ethan

    Ethan Level 2 Member

    Yea, so I am in the 15% bracket. I've just recently been filling my IRAs, I have about 15k, with about 11k in Roth and 4k in Traditional. I work for a government agency, so do not have a 401(k), but rather a 401(a), which does not have a match. Likewise for the 401 (a), I have just started contributing so the balance is not very large yet (under 5k). I believe my pension plan is non-ERISA, as it is a government agency.

    The last two years, I had been funding the Roth IRA in full, but this year switched to Traditional. I like the idea of getting the money back at the end of the year, and investing that (likely in brokerage account). I have been keeping about 5k for an emergency fund (roughly 3 mos. or so of expenses). To understand using an IRA as emergency fund, would that work for both Roth and Traditional? Is there a penalty-free withdrawal of contributions for an IRA?

    With all that being said, would you still contribute to HSA in full over IRA? What is the benefit to filling out the HSA over the IRA?

    Last edited: Aug 21, 2017 at 11:35 AM
  25. Matt

    Matt Administrator Staff Member

    Roth = Post tax money, grows tax free, no tax on qualified withdrawal
    Traditional = Pre tax money, grows tax free, taxed on qualified withdrawal
    HSA = Pre tax money, grows tax free, no tax on qualified withdrawal

    The strategy is that you pay out of pocket for medical expenses and keep the receipts for years, then in retirement, you withdraw from the HSA to reimburse yourself.

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