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Things to consider when Investing your HSA

4 min read

30 sec brief

Investing your HSA can help increase your health savings for the long-term. Finding ways to balance long-term savings with qualified out-of-pocket medical expenses that are part of your normal life will help create a balanced approach for HSA growth, reimbursements and savings.

Investing your HSA can help increase your health savings for the long-term. Finding ways to balance long-term savings with qualified out-of-pocket medical expenses that are part of your normal life will help create a balanced approach for HSA growth, reimbursements and savings.

Small HSA Investments Make a Big Difference

Albert Einstein called compound interest “the most powerful force in the universe” and “the greatest mathematical discovery of all time.” Albert Freaking Einstein. So if you skim the rest, it might be best to put that coffee down and really pay attention here.

The importance of compound interest is that small percentage investing gains can make a huge difference in terms of total growth over time. This means the sooner you invest, no matter the amount, the more opportunity you have to leverage the power of compound interest. These small gains can build over time and over the long-term, add real value to your HSA.

Did we mention with Lively’s HSA, you can invest from Day 1, with no minimum required. Sign up or log into your Lively HSA to get started.

Planning for Retirement While Paying for Costs Today

Balancing short-term savings for qualified out-of-pocket medical expenses and long-term health savings, is a very important and at times, complex decision. The more you save now, the more you will have in retirement when health costs are expected to exceed $275,000 per couple (on top of Medicare).

Be conscious of this balance so you can leverage the short-term advantages of tax-free savings and the long-term power of HSA investments and compound interest. And remember, once you have established your HSA, you can reimburse yourself for any qualified out-of-pocket medical expenses today or 10 years for now. That means you can always pay for qualified medical expenses out-of-pocket, let your HSA value continue to increase and decide at a future date to reimburse yourself. You have that option to do what makes the most sense for you.

Watch Out For Fees

Just like small investments having a big impact increasing the value of your HSA, fees can have a big impact decreasing the value of your HSA. There is nothing worse than having your hard-earned (and saved) money taken from you by hidden or obnoxious fees like account management, investing or just by using your HSA debit card. Be conscious of these hidden costs so you can best optimize your HSA funds. You worked so hard, don’t let legacy HSA providers nickel and dime your health savings away from you. Livey’s HSA is free for individuals. This includes HSA investments*. We want to help you make the most of your HSA – a little can make a big difference!

Talk to an Investment Professional

An HSA can and should be part of your savings or retirement portfolio. An HSA compounded with other investment vehicles or retirement vehicles like 401ks or IRA can provide a balanced approach to savings and investing. To see what works best for you and how to leverage these options to maximum growth potential, speak to a licensed tax or financial planner. Leverage their expertise to increase your HSA account value and watch your balance grow for years to come.

Healthcare costs aren’t going anywhere, except maybe up. Understanding the balance of short-term vs. long-term health savings will help you prepare for today, tomorrow and years to come. It’s never a bad idea to get ahead of the curve, especially with health savings. But don’t worry, if you do save TOO MUCH, after 65 years of age, you can use your HSA for anything just like a 401k or IRA.

Disclaimer: The content presented on our website is for informational purposes only, and is not, and must not be, considered investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate investment, accounting, legal, and financial professionals, as appropriate, before making any investment or utilizing any financial planning strategy. Investments involve risk and are not guaranteed.

*Additional TD Ameritrade transactional fees may apply

Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.

About the author

Lively

We are HSA Experts! Lively is a Health Savings Account (HSA) platform for employers and individuals. A 401(k) for healthcare.

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