Let’s taco-bout investing your health savings account.

If you’re new to the world of health savings accounts (HSAs), you may not know that you can actually invest these nifty funds … tax-free! And if you weren’t aware of all the fun things HSAs can do, you're not alone! Here's everything you need to know.
by Rachel Morgan Cautero August 8, 2019
A recent report from the Employee Benefit Research Institute found that just 4% of health savings account holders invested their money. Yikes. Don’t be a part of that statistic. Take a look into the many investment options offered by your HSA STAT! Because if you weren’t already investing your health savings account, that’s all about to change…

When you investing with your health savings account, you’ll enjoy triple-tax-preferred investing with your Starship HSA—tax-free when you save, tax-free when you invest, and tax-free when you use the funds for qualified medical expenses. That’s even better than a traditional IRA!

Yet with that said, investing your HSA closely resembles IRA investing — in fact, they share a lot of the same rules. You have a limit you can give each year but your money can earn a return without your having to worry about paying taxes until you want to take the money out of the account.

And like we said above, with an HSA, you only have to pay taxes (in the same way you pay them when withdrawing funds from your IRA) if what you’re paying for is a “qualified medical expense.” Cheese and crackers with a bottle of rosé? Um, no, although it probably should qualify. Knee surgery? Yes.

Let’s Talk Goals

Also like an IRA, you have multiple choices for investing — funds that match your savings goals, whether aggressive, conservative, or anywhere in-between.

And with Starship, you can either set up automated overflow investing, which means you’ll set a threshold and automatically invest in smart portfolios built with low-fee index funds, or you can opt for intelligent investing, which makes investing your health savings account built-in and effortless. And if something isn’t going to be seamless, chances are, it’s not going to happen.

Though the investing option via Starship costs $1/month, our tax-free HSA option is still free. This very well may be an instance in which fees are worth it … just sayin’.

Invest in … You

If you’re just dipping your toes into the world of HSAs, you may be overwhelmed with all the specifics of both your HSA and your HDHP. And the acronyms—why are there so many acronyms?!

But there are two important things to keep in mind as an HSA beginner: avoid HSA fees. After all, you shouldn’t have to pay to use your money. And of course: invest, invest, invest. (Your HSA, that is.)  
 

Take the first step
in taking care of you.