Fidelity HSA (HOW I INVEST IT FOR MAXIMUM $$$)


I used to think an HSA was just a
special checking account god I was so stupid cuz an HSA is so much more than that
I never maxed out my HSA contributions I never invested my HSA and I missed out
on some huge tax savings and potential investment gains but last year I opened
an HSA again and this time around it’s gonna be different because now I know
how to actually make the most of it in this video I’m gonna briefly touch on
what an HSA is and how it works then I’m gonna talk about how HSAs work
specifically at fidelity I’ll also talk about how to prioritize your HSA versus
other accounts like your Roth IRA and your 401k and last but not least I’ll
talk about how to invest your fidelity HSA for maximum profit obviously I can’t
tell you what to invest in because you’re an adult and you can make your
own decisions but I will show you how I’m investing my fidelity HSA so you
have a real life example of what it could look like for you so if you’re
interested in learning how to be smarter with your HSA and to make sure you’re
getting as much benefit out of it as possible then keep watching ok let’s
start off with a little HSA 101 the HSA stands for health savings account the
name is kinda misleading because health savings account
sounds like a bank account and that’s why for the longest time I didn’t know
that you could invest your HSA but HSAs are actually not bank accounts they are
full-blown investment brokerage accounts and they’re designed specifically to
help you invest and pay for health care with pre-tax money HSA is come with some
really awesome tax benefits in fact I think they’re the ultimate investing tax
loophole because they give you a tax shelter in three instances you make
pre-tax contributions we have tax-free growth and you have two acts free
withdrawals as long as those withdrawals are for health related expenses compare
that to the traditional IRA traditional IRAs allow you to make pre-tax
contributions tax-free growth but not tax-free withdrawals and then the Roth
IRA you make after-tax contributions Shen’s tax-free growth and tax-free
withdrawals so the traditional and the Roth IRA they offer tax shelters in two
out of three instances whereas the HSA gives you a tax shelter in all three
instances if you could use a helpful guide on how the HSA compares to other
types of accounts then download my ultimate guide to IRAs 401ks and HSAs it
took me a long time to finally understand the difference between all
these different retirement accounts and also it took me a while to understand
which ones I should prioritize in my own finances so to make it all easy for you
I’ve packaged everything I’ve learned and created this PDF that summarizes the
benefits of each account there’s examples recommendations on which ones
you should open as well as where to open them it has literally everything you
need to know to set up your accounts for maximum profit so click the link below
to download it okay so back to HSAs HSAs are not substitutes for health insurance
they are an account that you used in addition to your health insurance and
that insurance plan has to be one that allows HSAs when I want self-employed I
was shocked by how expensive health insurance is if you don’t get coverage
from your employer that’s why I went for a really cheap insurance plan that
allows HSAs because with my cheap insurance plan I pay low monthly
premiums and if then when I do need to go to the doctor I can pay for it out of
my HSA what’s cool about HSAs offer net fidelity is that they’re the most
flexible HSA provider that i’ve seen out there with a fidelity HSA you’re gonna
get access to the full range of stocks bonds ETFs mutual funds and investment
products offered at fidelity this is great because many of the other HSA
companies out there such as HSA bank and devenir only give you a very limited
menu of investments to choose from I don’t really like that I don’t like
being limited so I definitely appreciate the flexibility of my fidelity HSA a
fidelity HSA is like a hybrid between a checking account and a brokerage account
so as long as you have cash in there that’s not tied up in stocks and bonds
and other invest you can use it like a checking account
you get a debit card that looks like this
and you can just swipe it to pay for doctor visits contact lenses
prescription drugs and things like that that’s why I invest my fidelity HSA a
little different from how I would invest say my fidelity Roth IRA because unlike
my Roth IRA which I’m not gonna touch until I’m much older I actually need to
spend some of my HSA right now on an ongoing basis so that’s gonna change how
I handle my investments a little bit so when you have X amount of money left
over at the end of the month to after you’ve paid all your basic bills and
rent you have a lot of options for example you can use that extra money to
pay down debt put it in your 401k put it into a Roth or traditional IRA you can
just save it in a bank account or you can invest it in a taxable brokerage
account or you can put it in your HSA so where does the HSA fit in with all these
different priorities here’s how I think of it when you’re trying to decide where
to allocate your money there’s two considerations first of all where can I
get the highest after-tax return on my money I’m always thinking about
after-tax return the second thing is when do I need to access that money
that’s the second consideration so if I’m looking for highest after-tax return
on my money then the obvious answers are I want to prioritize any type of tax
advantaged investment account like HSAs 401ks and IRAs but then the downside of
that is that with accounts like those your money is more or less locked up
until you retire so if you want to invest and save money to buy a house
then an HSA or an IRA probably isn’t the place to do it I think the question you
need to ask yourself is what’s your number one financial goal right now if
your number one financial goal right now is to save up to buy a house then
probably your HSA isn’t the most important thing in your list of
priorities for me right now my number one financial goal is to get the highest
after-tax return on my money so that I can reach a 1 million dollar net worth
as soon as possible I’m also ok with having that million dollars in accounts
that I can’t access until I’m retired because I’m not planning to touch that
money anyway I have other sources of income in the mean time so for me I
prioritize my HSA and my Roth IRA the annual HSA
contribution limit for 2020 is 35 50 and then for 2019
it was 3500 I always always try to max out my HSA before I max out anything
else even over my Roth IRA that’s just me though a big part of investing is
taking taxes into consideration taxes will eat up at least 20 to 30 percent of
your investment earnings but with the HSA and it’s triple tax shelter you
don’t have to worry about any of that although I don’t know your exact
situation and you may have different financial priorities than me I would say
the HSA should be pretty high up there on your list of priorities you don’t
invest with the right accounts you’re gonna end up paying way more taxes than
you need to on your investments so don’t forget to grab my ultimate guide to IRAs
401ks and HSAs to make sure you’re not leaving any
money on the table and that you are set up with the right accounts the download
link is right below this video in the description and finally let’s talk about
how to invest your fidelity HSA you don’t have to invest your HSA you can
use it as if it were just a straight checking account and spend your health
expenses out of there or you can use it as a wealth building investment vehicle
and then you can also use use it for both which is exactly what I do so as I
mentioned earlier the contribution limit for 2019 for the HSA was $3500 so what I
did was I divided this amount by 12 which gives me $290 and then starting
January 1st of 2019 I started making automatic monthly deposits of 290 so
that way I know that by the end of the year I would have made twelve deposits
of 290 each and that would have gotten me to my HSA max of 3500 for the year as
for investing that money I used the fidelities automatic investing feature
to set it up so that my monthly deposits automatically buy more shares of some of
the index funds that I already own the key here is that the index funds need to
be mutual funds and you already have to own them if you want to automate your
investments then you have to first buy the investments and then set up the
automatic feature with those investments that you already own if you want some
ideas on which in funds to buy for your fidelity HSA in
the first place check out this video right here it goes into a lot more depth
about how to pick the right funds and it’s really good so definitely check it
out so anyway back to my $290 monthly HSA deposit as soon as that money from
my checking account hits my fidelity HSA I set it up so that $200 of it goes
automatically towards buying more shares of the index funds and then the
remaining $90 stays in cash I did that because I want that $90 every
month to keep accumulating so that the next time I need to buy more contact
lenses or pay for a doctor visit I can just swipe my fidelity HSA debit card
without having to sell any stocks to cover that expense so next year I’d
really like to get LASIK so I’ll probably cut back on the amount that I
automatically invest and keep more of that $290 in cash so for you if you know
that you have some big medical expenses coming up in the next year or so whether
it’s having a baby or getting a surgery or just getting LASIK like me then feel
free to use your HSA like a savings account so you don’t have to invest it
in fact you probably shouldn’t invest it because the stock market is a place for
people with long time horizons in case you haven’t noticed by now I’m a big fan
of fidelity because in addition to the HSA fidelity offers all kinds of other
accounts and services for all your financial needs not only do I have my
HSA at fidelity but I also have my everyday checking account there I have
my Roth IRA there my step IRA and at one point I even had a fidelity credit card
something that really helped me in my financial journey is having all my
accounts in one place because it kept me organized and it was a lot less work to
manage I know many of you have an old 401k lying around somewhere from a
previous job and one of the smartest money moves you can make right now is to
roll over that 401k into an IRA so that you have all your finances in one place
like I do in next week’s video I’m gonna talk all about how to do a fidelity
rollover IRA so if you’re thinking of rolling over your 401k to consolidate
all your finances at fidelity then I want you to subscribe to my channel and
hit that note so you don’t miss that video that’s it
for now thank you so much for spending this time with me I appreciate you I
appreciate you I appreciate you I post new videos every Wednesday so I’ll see
you next week same time same place and don’t forget to download my ultimate
guide to 401 k’s HSAs and IRAs remember to invest early and
often and to boldly and courageously go after the life that you want

100 Replies to “Fidelity HSA (HOW I INVEST IT FOR MAXIMUM $$$)

  1. ***FREE DOWNLOAD: The Ultimate Guide to Brokerage Accounts
    http://bit.ly/ultimateguidepdf

    Also – please show me some love in the comments… for the YouTube algorithim 🖤

  2. Great topic Rose. I have been thinking about setting up an HSA. One of the things I couldn't agree with you more on is a comment you made at 10:35 about the simplicity of having all your finances in one place. Personally I'm with chase bank but man do I love just logging in and checking my brokerage or Roth or my savings accounts etc. Paying Bill's is so easy now compared to 15 years ago. Pluse free trades are awesome. Having everything in one place is so much better than having to deal with several different accounts. Well said Rose and I gave this video a like.

  3. Amazing content! I found that you can pay out of pocket and save the money for reimbursement years later. This way my money grows tax free in my HSA. You can reimburse yourself anytime years later and you can save the receipts and leave the money inside your HSA to grow tax free. What are your thoughts on this?

  4. Been with Fidelity for 29 years so far. I have been maxing out my HSA lately and not touching it since i am overall healthy. What are your thoughts on using it to purchase health insurance since i plan on retiring at 59 1/2 ? I will need it till Medicare age.

  5. The letter "A" in IRA and HSA is short for "Arrangement", not "Account"… At least that's how the IRS explains it. So an HSA is a Health Savings Arrangement, not too dissimilar to an IRA.

  6. Try to not spend your HSA funds right away. Let the money grow and draw on it later based on your earlier expenditures. In theory you could save up enough when you are young and if you invest it well, the HSA account could become worth enough to cover all your health expenses in your later years.

  7. You need to talk about employer-sponsored HSA plans. If you make contributions from your paycheck you can avoid social security and Medicare taxes.

  8. Based on the $3,500 limit you list, I assume you have a HDHP for an individual. But there is a different limit for family coverage – basically 2x. Also I see you have a joint account at Fidelity (it was in your video). I assume that means there's a chance you have a boyfriend or other life partner. If you two are covered under the same insurance policy (like me and my girlfriend are), you can both contribute the family plan limit without actually being married as the IRS rule is based on the type of coverage you have and only caps the total amount you can deduct if you are married filing jointly…

  9. Went to subscribe to all your feeds, then read your Instagram that says you teach women. I guess this isn't for us guys. #dontbesexist

  10. if someone put most of her money into fidelity and the amount exceed $250000, then is the amount over $250000 FDIC insured? I know that FDIC insures $250000.

  11. I am also a big fan of fidelity. Love having everything in one place. Their customer service is second to none. I will have to give them a call to have them help me set my HSA up like yours. I like the automated method you spoke about.

  12. This is the first time I’ve heard of HSA. Thanks for explaining, you got me interested!

    I sent an ig DM a while back. Could you check it when you have time? Also, do you ever use Robinhood or m1?Have fun on your trip 🙂

  13. The HSA can help you avoid the Obamacare trap.
    If a single filer makes above $25,000 , he starts to pay back the Obamacare subsidy; at about $55,000 he owes all of it.
    A person over 60 can pay $8000+ per year.
    The only way to reduce your income for Obamacare subsidy calculation is the HSA contribution.
    I concur with Ryan L, invest in the HSA and let it grow until you are retired.

  14. I have been getting mine through my workplace and it's a total gamble because you have to use it or lose it. You did not mention a time limit so I am assuming there isn't one?

  15. Great information. I have been thinking of moving my 401k to fidelity anyway so I will definitely be looking forward to your next video.

  16. Rose, thanks for posting this video! You do an amazing job explaining financial topics and I hope you continue to thrive!

  17. Please do a video if you can where you compare the large growth active funds from fidelity. The top one FOCPX has a higher expense ratio, but it makes huge margins. Your thoughts? TIA

  18. I do have a Family HSA and I didn’t know I can have the money invested. 😩. I will open a HSA with Fidelity and transfer my 💰 on it. You didn’t mentioned with family HSA the annual contribution in 2020 is $7.100.00and if you are over 55 years old you can contribute an extra $1.000.00

  19. Love your videos. When I retired I noticed I was being charged $5.50 a month for my HSA with UMB. Apparently my company pays this fee for their employees but not their retirees. 🤬 I did some research and found out that Fidelity was not only a highly-rated HSA provider but they did not charge any fees. Switching was a no-brainer.

  20. They say you should max out your it's but is it that easy? Isn't the max contribution like 19k how do you put over 1k to that roth every month?

  21. $3500 is the individual limit. But if you’re married it’s $6900, well, it was last year. I think it may have been bumped to $7000.

  22. Is there a limit to how much unused money can rollover year to year in a HSA? I guess my fear is to max out my HSA in order to get the tax benefits but then not have $3500 worth of medical expenses in one year. Does that make sense?

  23. Thank you so much for posting! This is so helpful and I learned so much. I had no idea you could invest HSAs! Question though. Lets say we never touch the HSA and keep contributing/investing until we reach retirement age. Would we then be able to cash it out?

    Also, how do you go about contributing pre-tax money? And can you write it off when you pay taxes?

  24. Be careful with which HSA company/administrator you get your account. Fees are rampant. I had BenefitWallet HSA a few years ago, and fees just ate all the money I put in.

  25. I love you, Rose…..how is that for the Youtube algorithm ? lol . You are a gift from God….a gift not only to help people with their financial future, but a gift of beauty, as well. You my dear are what we call “the complete package”.

  26. I have an Hsa with my employer and have a savings account. Can I set up a second hsa savings account with Fidelity too? I know I will need to watch my yearly contribution limits. So, I do not go over. Thank you

  27. Your next video should be how to arbitrage on the Hong Kong stock exchange using Fidelity (step by step).

    A lot of investors arbitraged when BABA was listed on the Hong Kong exchange. Now, JD, BIDU, YCOM, and YUMC are in talks to get listed on the Hong Kong exchange, too. Those talks are expected to accelerate after Jan 27 (the Lunar New Year).

  28. Great info. I never thought of setting up an HSA but after watching this, I'll have my account set up no later than Friday. Very smart, 200 into an index fund and the 90 left in cash. I recently got a pair of glasses. Why in the heck did I pay for the exam and glasses that was taxed with money that was already taxed? That's nuts! No more!

  29. Hey great video, I was trying to figure out where to place my HSA in the allocation of my funds and this really helped. thanks!

  30. Hi, A tax return question regarding fidelity hsa account. I do have a hdhp, and I open a hsa with fidelity using my after tax money. For the tax return, what is the proper way to report to irs? Does IRS need a proof for having a hdhp? My w-2 wont show my contribution since I open the hsa using my after tax money. First time using HSA, anyone please educate me? thanks

  31. I made over $463,000 in 3 months from investing in the financial markets off a $150,000 capital , I find it funny that she focused on just Fidelity HSA which is slow strategy when it comes to making money.

  32. hey guys. she's single! her max contribution is only $3,500 which is for individual otherwise she would be contributing $7,000 for the family max. everyone go shoot their shot.

  33. Great video Rose! Many people miss out on the benefits of an HSA, thinking it's literally only a savings account. I just did a video reviewing Lively as an HSA Provider. Fidelity is on my list to do in the future!

  34. Rose, you have my love for sage investment advice and just general perkiness when the market is down. S. Frazier, M.D.

  35. Hi Rose, discovered your videos today. Youre awesome, well done and thanks for all the advice. Have a great year ahead

  36. What is the best insurance company with the high-deductible health plan that I can use to set up a HSA has a premium pass through contribution

  37. Hey Rose I've been trying to get a magic formula investing activation code for days. Do you know if they usually take a while to respond? Know any of there contact info?
    Thank you for all the advice and inspiration

  38. Hi! Love your investment contents. They are so insightful, practical and to the point. Can you explain the P/E ratio? I am a bit puzzled by the formula. The ratio doesn't seem to take into account the company's assets in determining the total value of the company and the fair value of the price of the stock. Why is that? Thanks!

  39. Can you have an HSA without having health insurance?
    Is there any benefit to having an HSA if you live in a country where you don't have to pay for general healthcare (doctors visits, emergencies, etc.)?
    Does my employer have to make the contributions to the HSA in order for the money in it to be pre-taxed?

  40. Reading over the Fidelity site on the subject of HSA, I learned that you can use IRA money to fund your HSA. This would be a huge benefit. In my situation, I am converting funds from old IRAs to ROTH accounts each year but I have to pay taxes on the money I convert each year. If I used up to $4,550.00 USD of the IRA each year to fund the HSA , it would be tax free. The only problem I have is, I am an EX-pat with over seven years off shore and counting. No point in flying back to the US and opening the required high deductible health plan just so I can fund an HSA tax free from an IRA. I wish I could I wish I may but there ain't no way!!! This is still extremely valuable information for those who can take advantage of it. A big round of applause @ Rose for bringing the information to us all.

  41. Hello Rose, I reside in the UK though have my broker in the States where I invest in stocks, ETF, and hopefully to start with Index Funds this year. How can I be a beneficiary of the Health Savings Account (HSA) or the 401k and ROTH account?

  42. I have a hard time applying online..? They said It is unable to identify me…it’s frustrating…is there any way to apply..? For it?😃

  43. Hey, how do I find out if I have a 401k from a previous employer?

    I also have a 401k and HSA with my current employer. Need to see how much I’m contributing to my HSA (I forgot). 401k my employer only matches up to a certain amount % but I put in a little more than what they match currently.

  44. Thank you very much, would you also touch the topic of finding a health insurance that allow you to open an HSA, I am very new to this topic, thank you again

  45. Rose you are amazing. I am far from a novice investor (30+ years) but recommend you to anyone looking for investing info. You are enthusiastic and knowledge, keep it up. I also just recently discovered the benefits of an HSA. I treat it like another IRA. I also chose Fidelity because you can invest in anything. I maxed out last year and this year already so i could get that money invested. Another great "hack" is you don't have to use for health today. Pay out with your regular money and keep the receipts and turn in later when you do withdrawal the money. Let your invested HSA account make money over many years. I am not going to use it until I retire. The HSA along with my regular IRA is going to greatly assist in my retirement.

  46. Shalom Rose , Blessings
    Your Video came to me just when I needed it. Can you do a video on how to establish credit and remove debt. Thanks have an Amazing Day ! much ♥ ✌

  47. Great video Rose. My employer funds part of my HSA, so it’s easy to get to the annual contribution limit. I I vest the funds and thankfully have not needed them yet for medical expenses. One other tip I have used, when I did need to pay for medical bills, I used a credit card offering the maximum points, then requested a withdrawal from my HSA and paid the credit card bill right away. Thanks for the video you’re an inspiration and absolutely gorgeous as well.

  48. I'm married and our goal is yours, to build wealth as we're paying off our last debt (our house). We want to be millionaires and partially retire in 15 years at 53 and 55 years old. We're maxing out our HSAs, then 401ks, then Roths. We pay extra on the mortgage so it will be paid off sooner. My biggest struggle is getting impatient and finding enough smaller goals to keep me motivated. I need to chill out and enjoy my little hobbies. Or try to make a hobby out of the journey because we can't do anything else better we're doing our best, and I even work a side job. Any advice?

  49. Or you could just invest it all, use your money to pay for medical expenses,
    Save all those medical bills and take that money later when you actually need it tax free. Just keep your receipts and is tax free any time in your life as long as you had medical expenses after opening the acct.

  50. Hey Rose was wondering if you are having trouble logging into your fidelity account today? I've been on hold with them for nearly an hour. Thanks

  51. Let me ask you a question !! If it's not too personal but what exactly is your current net worth ?? I'm askin' this b'coz I too have the same goal of attaining a net worth of one million!! JUST CURIOUS NOTHIN' PERSONAL…

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