Menu

Dump HSA funds and start over

Home Personal Finance and Budgeting Dump HSA funds and start over

  • Avatar XX17P 
    Participant
    Status: Dentist
    Posts: 43
    Joined: 09/10/2018
    Earnest refinancing bonus

    My wife and I will soon be taking the WCI Fire your Financial Advisor course ~ so please take that into consideration.  I understand that I have not created a written financial plan but have been a diligent saver and investor (with a financial advisor) for decades.  So this question may be the cart before the horse type thing…..I have a Health Equity HSA and I have some poor performers in my account.  I am nearing retirement, financial independent (despite using a AUM advisor) and do not use this account for medical expenses.

    Investment and cash total $81,000.   Investments as follows:

    MFS  International  MINGX R3             $ 14,393

    Pimco International Bond PFOAX         $   8, 051

    Vanguard Wellesley Income Admiral    $   7, 900

    Vanguard Total Intl Bond Index           $   7,820

    Health Equity upcharges the selection of Vanguard Funds by .033% per month on average balance.  Does this Vanguard upcharge constitute a reason to move to a different HSA?

    I wanted to confirm if other HSA’s have Vanguard fees?  If not, I would be willing to transfer my account.  There are target date Vanguard accounts available (with the same .033% monthly fee) that would seem reasonable to use if I remain with this HSA company.

    Please know I appreciate any guidance or comments.  I have work to do to shape things up I know.

     

    #204091 Reply
    Avatar XX17P 
    Participant
    Status: Dentist
    Posts: 43
    Joined: 09/10/2018

    Placing this under estate planning was in error…. probably should have been retirement planning or general investing.

    #204093 Reply
    Avatar Peds 
    Moderator
    Status: Physician
    Posts: 4405
    Joined: 01/08/2016

    Consider moving to Fidelity, and read this: https://www.whitecoatinvestor.com/the-best-health-savings-account/

    You can do so at anytime without tax considerations.

    #204110 Reply
    Liked by spiritrider
    Avatar XX17P 
    Participant
    Status: Dentist
    Posts: 43
    Joined: 09/10/2018

    Thank you Peds… I should have known to look up in archives.  Rookie move on my part.

    #204134 Reply
    Liked by Tim, Peds
    jfoxcpacfp jfoxcpacfp 
    Moderator
    Status: Financial Advisor, Accountant, Small Business Owner
    Posts: 8113
    Joined: 01/09/2016

    Placing this under estate planning was in error…. probably should have been retirement planning or general investing.

    Click to expand…

    Gotcha moved although @peds already took care of you. May help others.

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #204137 Reply
    Avatar jhwkr542 
    Participant
    Status: Physician
    Posts: 1312
    Joined: 02/15/2016

    Since you’re nearing retirement, it might be worthwhile to start moving it to a more conservative allocation.  HSA loses most of its tax advantages on death (except when your spouse inherits), so you should plan to start using it in retirement over any Roth money you have.

    #204170 Reply
    Liked by spiritrider
    Avatar XX17P 
    Participant
    Status: Dentist
    Posts: 43
    Joined: 09/10/2018
    Splash Refinancing Bonus

    Great point.  In my case, I am in fact married.  Should my wife die at age 90 that is some 38 years away.  So we have time to grow this a bit.  It provokes some thought as to when it would become prudent to engage this resource as it presently just an investment tool, but poorly managed on my part.

    #204302 Reply
    Lithium Lithium 
    Participant
    Status: Physician
    Posts: 1174
    Joined: 02/15/2016

    My employer uses Health Equity.  I moved it a couple of years ago, first to Saturna and now Fidelity.  Not only does their wrap fee cost you over $300 a year, but you are required to keep $2,000 in cash.  Add the wrap fee and the cost of cash drag, and on an average year that costs you around $500.

    I have read from other posters here that the average couple in retirement has $250k in retirement medical expenses.  So I would move it to Fidelity and go aggressive.  First I would change the investments in Health Equity to securities that are commission-free to exchange at Fidelity.  If you need to leave the Health Equity account open because it is the custodian designated by your employer, I would keep $25 in cash (the closing fee) there so it is not closed.

    #204324 Reply
    One Wet Bandit One Wet Bandit 
    Participant
    Status: Physician
    Posts: 47
    Joined: 10/14/2017

    You should also take into consideration where you live before deciding your allocation in the HSA.  If you live in NJ or California the HSA gets taxed- so you dont want to get too aggressive there- I switched my funds to Fidelity for reasons stated above but basically keep my fixed income/bond allocation in it (treasury funds) to avoid paying state taxes since I live in NJ.

    #204344 Reply
    Dreamgiver Dreamgiver 
    Participant
    Status: Physician
    Posts: 859
    Joined: 03/09/2017

    My employer uses Health Equity.  I moved it a couple of years ago, first to Saturna and now Fidelity.  Not only does their wrap fee cost you over $300 a year, but you are required to keep $2,000 in cash.  Add the wrap fee and the cost of cash drag, and on an average year that costs you around $500.

    I have read from other posters here that the average couple in retirement has $250k in retirement medical expenses.  So I would move it to Fidelity and go aggressive.  First I would change the investments in Health Equity to securities that are commission-free to exchange at Fidelity.  If you need to leave the Health Equity account open because it is the custodian designated by your employer, I would keep $25 in cash (the closing fee) there so it is not closed.

    Click to expand…

    My wife employer also goes through Health Equity. Does it mean we have to use them or can I transfer the money from HE to a different brokerage every month as it comes into the account?

    #204368 Reply
    jfoxcpacfp jfoxcpacfp 
    Moderator
    Status: Financial Advisor, Accountant, Small Business Owner
    Posts: 8113
    Joined: 01/09/2016
    My wife employer also goes through Health Equity. Does it mean we have to use them or can I transfer the money from HE to a different brokerage every month as it comes into the account?

    Click to expand…

    She can make trustee-to-trustee transfers as often as she wants. I’d recommend Lively or Fido. I do not know if this will save you the wrap fee of $300/yr (ouch!)

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #204372 Reply
    Lithium Lithium 
    Participant
    Status: Physician
    Posts: 1174
    Joined: 02/15/2016
    My wife employer also goes through Health Equity. Does it mean we have to use them or can I transfer the money from HE to a different brokerage every month as it comes into the account? 

    Click to expand…

    She can make trustee-to-trustee transfers as often as she wants. I’d recommend Lively or Fido. I do not know if this will save you the wrap fee of $300/yr (ouch!)

    Click to expand…

    The wrap fee I calculated was based on the prior poster’s balance of $81k.

    #204398 Reply
    jfoxcpacfp jfoxcpacfp 
    Moderator
    Status: Financial Advisor, Accountant, Small Business Owner
    Posts: 8113
    Joined: 01/09/2016
    The wrap fee I calculated was based on the prior poster’s balance of $81k.

    Click to expand…

    Got it, thx!

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #204399 Reply

Reply To: Dump HSA funds and start over

In case of a glitch or error, please save your text elsewhere, clear browser cache, close browser, open browser and refresh the page.

Notifications Mark all as read  |  Clear