Saturday, June 17, 2006

Investing Health Savings Accounts (HSAs)

I am having a hard time find a way to invest my Health Savings Account (HSA) in something other than a savings account at 3% interest.

My strong preference would be to find an HSA that allows me to invest in a mutual fund, perhaps a bond fund or even a stock fund.

I recommend using a bond fund in my book Health Insurance Off the Grid, but the reason I personally would invest in stocks is that I don't expect to use my HSA money in the coming years. Yes, I expect to stay healthy (don't we all??) but also I want to use my own personal out-of-pocket money first before even dipping into my HSA.

To me, the HSA is first and foremost a way to save for retirement, and only if I can't afford to pay the deductible amount at some point in time, then I would use HSA money.

I guess I see my HSA as a way to reward myself and my wife for us staying healthy. If we stay healthy until retirement, our HSA will instantly turn itself into an IRA (this is true) and we'll have extra money to retire with. Maybe we'll even save that money off to the side, not use it for day-to-day expenses (we have other IRAs, savings, etc. for retirement) and then pull it out for special occasions like a trip to Antarctica or something.

Your thoughts? Anyone have good results finding a reasonable investment within the context of an HSA?

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