HSA Investment Account
Just found out that I can invest my HSA dollars. Any tips on how to go about investing?
Don’t put the principal at risk, if you can’t afford to pay medical expenses by other means.
Invest in basic index funds and treat it as a retirement account. Don't use it for medical expenses. It grows tax-free and once you hit retirement age, you can withdraw the money penalty-free for any reason (not just medical), so it's sub-optimal to withdraw from it when you're young, because then you lose the tax-free growth. Use regular non-HSA money for medical expenses instead (keep an emergency savings account for this). (Whoever in the government designed HSAs are morons; it's structured to disincentivize literally the one thing that it's supposed to be used for)
It's nominally "for paying health expenses", but the incentive structure makes it non-optimal to use for health expenses. But many people are unaware of the precise rules, and so make the non-optimal choice to use it for health expenses, because that's what it says it's for. It's dumb even if the incentive structure was deliberately designed. Like, what's the point of creating a small tax-advantaged retirement account that can only be used by people who both have a high deductible health plan and have a sophisticated understanding of personal finance?
Thank you!!
I transferred mine to FirstDollar, where I can use a self-managed brokerage account from TD Ameritrade. I use that account to trade individual stocks. I also meticulously keep track of all my health expenses so I can pay them back sometime down the road.
Fire and forget