How to Invest in your Health Savings Account?

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Ever wonder how you are going to afford retirement homes or living care when you are older? Did you know that the cost of retirement homes are an average of $70,000 – $100,000 annual! I know you are thinking what I am thinking, and how are we suppose to afford that at the rate of inflation going. You know you can start investing in your health savings account (HSA), and we want to help you learn how! There are no income limits, and the maximum contribution for 2022 is $3,650 for single and $7,300 for family coverage.

1. Enroll in a High Deductible Health Plan

Enroll in a high deductible health plan if this is right for you and your family.  You will be able to find this out by thinking about medical expenses you plan on having for the year.  Questions to ask yourself. 

• Are you having a baby? 
• Are you healthy? 
• Are you a diabetic?
• Are you going to need more care this year?
• Are you going to set up a major surgery this year?

If you are healthy, you might choose a High Deductible health plan with the bigger employer incentive to receive the bigger bang for your buck, but realize you are going to pay a larger amount at the doctor’s office with your higher deductible and out of pocket. You are willing to take the risk.

If you are having a baby, you might choose a high deductible health plan that you do not receive as much of an incentive from your employer, but you can afford the out of pocket that comes with the insurance. 

If you are needing more doctor care, you might choose the lowest out of pocket since you know you will reach it easily. But you must also look at your monthly premium to ensure it works within your budget too.

2. Open a Health Saving Account (HSA) 

Sign up for your health account.  You will receive an email or a mailer to sign up for the employer’s health savings account if you enrolled in the high deductible health plan.

Go ahead and follow their instructions. Usually it is only a few steps and it is just like signing up for a bank account.

3. Deposit Money into your HSA

This is where you can win more with your dollars. Most of the time you will deposit money straight from your paycheck to your health savings account.  You will not even see this money hit your personal bank account.  I always recommend doing this especially if you are not a saver!

I remember when I raised my husband’s when we first got married. He did not notice at all until four paychecks in and he was like why are my checks so low?  I need to look at my paystub.  (Don’t worry you guys – I told him I increased our savings before I did it, but I may have forgot to mention that it would be coming from his direct paycheck) 

4. Research your Employer and their contribution

This is free money that you are able to get from your employer, and did you know they actually account for it as your salary when coming up with your real salary.  They take this into account when they are giving you your monthly salary because it is the total benefit you are receiving.  (So if you are not taking full advantage of ALL your employers benefits –you should be!) Call your Human Resources – they are not all scary. I am an expert in this area – I worked in this for over 2 years helping people receive their full benefit from their salary to their money incentives such as 401k and wellness. 

5. Research if you need to do a health exam or other activity to receive free money

This is free money too.  If you did not read number 4 and you skipped it, go back to it.  I explain why you want to take full advantage of this one too. 

It can range usually from $100 – $1000 of free money here. 

6. Take advantage of your triple tax savings

We want you to save your hard earn cash from uncle sam and this is how.

You do not pay taxes on the money when you put it in.

You do not pay taxes on the money when it grows.

You do not pay taxes on when you use it for qualified expenses.

Hence why there is a government limit each year. They want you to take advantage of it, but they do not want it to be too much. 

You could make your taxable income from $75,000 to $71,400 with just saving your money in an Health Saving Account. This means the government will only tax you on $71,400 instead of the true $75,000 you made! 

This is AMAZING right? I know, so keep going and I will show you exactly how to invest it too. 

More articles you will enjoy:

• 5 Reasons Why to Invest
• 102 Ideas to Grow your Net Worth
• Our Story from 2020 and 7 Lessons You Can Learn From

7. Keep the minimum amount in your regular HSA account

The minimum amount in your HSA will vary upon account.  Our HSA minimum cash balance is $1,000, therefore we keep $1,000 in our cash account of our health savings account. This is what I call my emergency medical account.  If we were to go to the ER or something really bad happen and we did not have the money for it, it would come out of this account. 

8. Invest the rest of your money in your HSA

Just like your retirement account or your 401k account or whatever account you invest in.  You will be able to choose a fund to put your money in depending on your companies investments.  This is where your HR of benefits really come to work.  They are the ones hard at work trying to get the best for you guys to keep you working at the company.

Investing in an HSA, you will usually have different mutual funds or target date funds.  These are low cost, but high yields of returns.  

You will choose how much you want your portfolio to be and go from there. 

Our health savings account is with Bank of America and I will provide you additional screenshots on how to invest with Bank of America if you have a Health Savings Account with them too!

Hope this helps you deep dive and invest in your triple tax savings account called a health savings account.  We will be trying to use our for big expense and especially for when we become old.  Because did you know that at home nursing care can cost right now minimum of $13,000 and minimum at a nursing home is $7,000 in Nebraska.  Think of that just for your rent, room, board, food, and care – that is insane.  We are talking $156,000 a year minimum! Wooohoo – we better all do some more saving.

Like if you are going to invest your health savings account now or you already started.

Share if you think others should know about this benefit.

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