Managing your Health Savings Account (HSA) is a very simple process, and there are several ways to invest in this type of account. Being a tax free account and totally yours, it is up to you how, when and where to make your own choices on how to keep your money. We will list three of these methods.
1 – Invest it all
|Pay all medical bills going forward with money from your normal accounts. Keep the receipts and then sometime in the future use the proceeds of the investments to reimburse your cash using the receipts. All the gains and principal would still be yours no matter how long you waited.|
2 – Invest Funds Over Annual Out of Pocket Maximum
|This idea consists in investing money over your annual out of pocket maximum. This is an approach where you can pay all of your possible health care bills in a given year with the money and only the remaining funds get invested.|
|3 – Invest Funds Above Expected Medical Expenditures||The third strategy is to invest the portion of an HSA above what you expect for a given year. Take the lower end of your average years medical expenses, and invest in either short term bonds that mature in that year with a little left in cash. Everything else must be invested in stocks for future years.|
Whether your HSA is offered by your employer or you’ve opened one on your own, you might have several options for investing the funds of your HSA account, all depending on how much money you want to invest. Investing gives you the best chance of accumulation over time. Depending upon your tolerance for risk and timeframe until retirement you’ll be able to choose from options that align with your long term investment strategy. All bring specific benefits for each type of customer. Just like almost everything in an HSA account, it is up to you to choose the best option for you. See How TalliHealth can help you get up to your funding today.