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HSA funds to investment account

1,133 Views | 6 Replies | Last: 3 yr ago by insulator_king
RightWingConspirator
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AG
All, hoping someone can help me out with my question. I googled it, but keep getting an answer to a question I'm not asking. Here's my situation: I have about $30,000 in an HSA account that I've not touched over the years. I could reimburse myself every penny of that with qualifying medical expenses, but I've not done that. What I'm thinking of doing is taking a portion of those monies and moving them into my trading account to try and take advantage of the lower prices we've seen because of the sell off. These monies in my HSA account are already invested, but it will not allow me to invest in individual securities; hence, why I'd like to take portion of those funds and move them into my trading account where I can pick up individual equities.

Can this be done as simply as what I'm thinking? I have qualifying medical expenses so I should be able to cut myself a check for $10,000 and move those funds into my trading account, correct?

Please check my understanding as far as tax implications, there shouldn't be any on the HSA gain as I have the qualifying medical expenses. If invested in an after-tax trading account, there'd be no tax implications on those funds until I decided to sell the equities. I'm a buy and holder so I'd not be looking to sell anything I'd be buying anytime in the next 3-5 years. Did I get that right?

What say you guys? Are there things I'm missing? Obviously our motivation here is that we feel we can do better picking up individual equities than the fund families offered up by my HSA.
bmks270
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Find an HSA account that lets you invest how you want. I recently moved mine to fidelity. After you have the account, you fill out a transfer form with Fidelity , specify the bank, account number, and amount you want transferred, and Fidelity will contact the HEA holder to transfer the money into Fidelity.

RightWingConspirator
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Please let me know if I can do what I'm trying to do above. I don't have the option of switching my HSA account as I get that benefit from my employer and my employer chooses who administers the HSA.

After doing a little more research on the matter, is there any reason to think that I would be limited to using my employer's HSA choice? I don't really think too much on the HSA as I typically never touch those funds so I'm not aware of what options are available to me.
YouBet
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RightWingConspirator said:

Please let me know if I can do what I'm trying to do above. I don't have the option of switching my HSA account as I get that benefit from my employer and my employer chooses who administers the HSA.

After doing a little more research on the matter, is there any reason to think that I would be limited to using my employer's HSA choice? I don't really think too much on the HSA as I typically never touch those funds so I'm not aware of what options are available to me.
Since this is driven by your employer I'm pretty sure you are limited to the funds and securities available to you by your HSA administrator as agreed upon with your Employer. In that regard, it's like your 401k. You get to invest in what they give you.

I was not able to just randomly pick equities in mine when it was run by employer. I had a set menu of funds I could invest in like my 401k. I left company and rolled it over to Fidelity which opens up the world. (I'm still waiting on that rollover; it takes 4-6 weeks with my particular HSA administrator)
RightWingConspirator
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YouBet, as I've done more research, I think you can set up another HSA and simply move funds between the two HSA accounts with a Trustee-to-Trustee form. It's tedious and takes a while, but it allows you to keep the HSA your employer chooses and your paycheck will continue to get deducted due to the contributions and then I can take those monies and move them into another HSA of my choosing using the aforementioned form.

Does anyone see it differently?

bmks270
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RightWingConspirator said:

Please let me know if I can do what I'm trying to do above. I don't have the option of switching my HSA account as I get that benefit from my employer and my employer chooses who administers the HSA.

After doing a little more research on the matter, is there any reason to think that I would be limited to using my employer's HSA choice? I don't really think too much on the HSA as I typically never touch those funds so I'm not aware of what options are available to me.


You can open an HSA with another institution and have them initiate a transfer of funds. That's what I did. You can do this as many times as you want. You cannot simply withdrawal the funds that will look like a dispersement and be reported as such to the IRS. So you have to use the new institutions transfer request process. The new institution contacts your HSA provider on your behalf. This way it is not recorded as a distribution. That's my understanding after going through the process with Fidelity.

I asked my employer if they could change my deposit info to the new HSA and they said no, so I will periodically initiate a transfer using the request form in order to move funds from my employers account to my new HSA.
RightWingConspirator
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Thank you, your understanding aligns with my understanding as well. I'll keep my Employer's choice for HSA and make contributions to that and periodically move those funds into my Fidelity HSA.

Appreciate the help, guys.

insulator_king
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I use Lively for my HSA account. You can invest the first dollar.

They use TD Ameritrade as the custodian.

My few shares of RKT in my HSA did well today!
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