I have HSA in Health Equity. I was thinking to invest in mutual funds through my HSA account but I don’t have much knowledge about it. Is that a good idea to invest in funds in HSA considering it’s tax free? Also any suggestions on the funds I should opt to invest in? It has some limited Vanguard options only.
HSA is the next logical retirement vehicle after 401k; in some ways it’s far better
Yes, invest the money. Only thing is, watch out for the fees health equity charges, it's a lot in my opinion. What I do instead is, do an hsa transfer to fidelity (once a month after my monthly contribution to health equity) and invest via fidelity in the total stock market fund.
Looks like a great idea, but just to confirm can we hold 2 HSA accounts? My current one is through my employer.
Yes, you can hold any number of hsa accounts. Only thing is, total contribution to all these accounts combined should not exceed the 3400/6800$ limit for single /joint filing (numbers may be slightly off) Also, let's say you deposit through your employer 6500$ for a year in health equity , and periodically transfer 6400$ to fidelity hsa as a trustee to trustee transfer, the 6400$ is not counted towards the yearly limit.
Also in CA, HSA gains and dividends/interest are taxed like regular income. That shouldn’t deter you from investing though. Just wanted to make sure you knew beforehand.
Yea I just dump mine into vanguard total stock market
Do you also have through Health Equity? Can you suggest some good Vanguard funds?
VIIIX is what they have for their vanguard total market fund (unless it's been updated, in which case look for VTI / VTSAX)