Submitted by NCSUGrad2012 t3_127puwg in personalfinance
So my employer HSA gives me the option to invest through yourflexbenenfits.com (which is mercer marketplace). It uses some Vanguard funds, but not VTSAX, instead it's all in VFIAX.
However, they charge me $2.50 a month for this. It's no a huge deal, but if there's another way or some way to get around this, it would be nice.
Nice, can I automatically move that money? Right now, every paycheck I get moves into my investment fund.
No. It’d be a manual process
That’s frustrating but nice if I’m going to save money. Fidelity doesn’t charge any fees? I have no money with them now.
There's a few things to factor in.
First, your employer is very likely only going to allow contributions from your paycheck to go to this provider. Paycheck contributions are the most effective way to get money into an HSA because those dollars bypass payroll taxes. Saving on your owed income tax can be done by deducting non-payroll contributions on your return, but that method cannot get you the 7.5% payroll tax savings.
Second is that you are allowed to transfer your HSA balance from this provider to any other provider you've opened an HSA at. So you could find a new provider without the investment fee (Lively and Fidelity are common recommendations) and use that as your primary HSA investment account.
The last thing is that every HSA provider I've ever had charged a $25-35 transfer fee to send my balance to another HSA. So now you have to balance that against the monthly fee or leaving your balance un-invested for longer. The IRS does allow an "indirect HSA rollover" that bypasses that fee, but you only get to do that once every 12 months.
So there are ways to get out of that fee vs. costs incurred vs. investment goals that you have to balance. One simple strategy would be to just accumulate cash in this employer HSA (no fee), then use your "once per 12 month" indirect rollover to push that cash to another HSA where you do all your investing.
Nope no fees.
My experience with them was so positive I moved most of my money there.
My HSA charges a monthly fee if total assets are below like $2k. Once over $2k, no more monthly fee.
Check your plan documents to see if there may be a similar arrangement (but different threshold)
Nice. Which fund is your money in?
There’s a lot in there but I’ll double check, thanks.
Oh I have like 7 accounts for various purposes. Mostly fzrox and fzilx
Oh yeah, those are all really good points. Yeah, if they charge me $30 a year to transfer the money it’s not worth it since that’s what I’m paying each year to invest anyway.
Sounds good! Someone else pointed out my HSA might charge transfer so I’ll look into that but I appreciate it!
True. That is possible as well.
Mine doesn’t charge to roll over (Health Equity) so it’s worth double checking.
I roll mine to Fidelity once a quarter. The only thing HE requires is I keep $25 in there, which is fine.
Werewolfdad t1_jef734c wrote
You can just periodically transfer most of the funds to fidelity and invest for free.