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Options to invest your HSA funds

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Your HSA is an investment vehicle that can play an important role in your wealth and retirement strategy. Sign in and start investing today.

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Accelerate your financial wellness — start investing now

Once your health savings account (HSA) reaches a certain designated balance, you may choose to invest a portion of your HSA dollars.

Investing HSA dollars has many potential tax benefits and can be an additional way to save for long-term health care needs and financial goals. HSAs are triple tax advantaged, making them an effective savings and investment account.

Benefits of the HSA:

  • All contributions to an HSA are income tax-free. 
  • Withdrawals for qualified medical expenses are income tax-free. 
  • Any interest earnings and investment growth from deposits are income tax-free.

Investment guidelines

  • When funds are transferred to your investment account, the amount of the transfer cannot bring the balance of your HSA below your investment threshold. 
  • The minimum amount that can be transferred to your investment account is $100. 
  • You can’t make payments for qualified medical expenses directly from your investment account. If you wish to use funds from your investment account to make payments, the funds will first need to be moved back into your HSA.

Use your HSA as a tool for retirement savings

You can use your HSA with other retirement accounts to maximize your after-tax retirement income. Saving in an HSA for retirement gives you a tax-advantaged account dedicated to future medical expenses — allowing you the opportunity to avoid dipping into retirement accounts intended for cost-of-living expenses.

Also, HSAs are a great way to pay for qualified medical expenses in retirement. Once you reach age 65 you may use your HSA funds for non-qualified medical expenses without penalty — just pay ordinary income tax.

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HSA investment overview

Investing HSA dollars has many potential tax benefits and can be an additional way to save for long-term health care expenses and financial goals. Once your HSA reaches a certain designated balance, typically $2,000, you may choose to invest a portion of your HSA dollars.

Watch this video to learn more about how to set up your investment account and start investing today.

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Narrator:

Congratulations! Your health savings account has reached a designated balance, also known as the investment threshold. That means you can choose to invest some of your HSA dollars as part of your long-term savings strategy.

To set up your investment account, sign in to your account and select the “Investments” hyperlink on your HSA account page or select “Manage HSA Investments” in the “I Want To…” drop-down.

You can then follow the instructions to enroll in an investment account.

First, you will be prompted to set up your fund elections. Decide how much to invest. Select your mutual funds. And Allocate your monies across.

You will decide how much money you want to transfer into your new investment account. Then you will be prompted to set up your fund elections. This is when you select your investment options and decide how to spread the money among those funds.

You can also choose to make investing even easier with recurring transfers – any funds that exceed your designated balance will automatically be transferred into your investment account.

You can change your fund elections at any time. Sign in regularly to view your investment performance, make additional purchases, and manage your investment selections.

Remember, the funds in your investment account can grow income tax-free. And if you ever need to move money back into your HSA, it is easy to sell your investments.

If you are eligible, don’t wait! Go ahead and set up your investment account today!

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Options to invest your HSA funds

Looking to invest yourself?

You can choose from a wide variety of mutual funds screened for high Morningstar ratings and some of the lowest expense ratios in the industry.

There are over 25 mutual funds from leading investment firms, with diverse choices by investment objective, market sector and asset class.

Sign in to your account to view educational tools and resources such as videos and an asset allocation calculator. These can help you decide how to allocate your portfolio among different types of mutual funds. You can find these resources and more in the "Investments" drop-down in the main menu bar.

Start investing today 

Need help or pressed for time?

Betterment is the largest independent digital investing advisor and offers a more managed, automated way to invest your HSA money. Betterment combines low-cost, tax-efficient investment strategies with technology and personalized advice to help you pursue your financial goals.

Based on your answers to a few questions about your goals, time horizon and comfort with risk, Betterment will customize a portfolio of exchange traded funds (ETFs) to help you meet your needs. ETFs are chosen using criteria such as low cost, tax efficiency and diversification that align with your goals and risk profile.

As your investment goals evolve, you can always update your profile so that your investments stay aligned with your objectives. When you want to add or remove funds from your investments to pay for qualified medical expenses, Betterment will automatically buy or sell what is needed to ensure your portfolio maintains the right asset allocation and level of risk.

Betterment investment options are coming soon!

Start investing today 

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FAQs

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  • Investing your HSA dollars can be an additional way to save for long-term health care needs and financial goals. By investing your HSA dollars, you can realize tax benefits and get ahead in your retirement savings strategy. Not only are HSA contributions tax-advantaged, but all interest earnings and investment growth is also income tax-free.

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  • HSA investments through Optum Financial are simple to start and just as easy to manage. Once your HSA meets the required balance*, you can set up investments in a matter of minutes through your online account or using the mobile app.

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  • No. Investment products are not FDIC insured, and are not bank issued or guaranteed. They are subject to risk, including fluctuations in value and the possible loss of the principal amount invested. 

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  • No, all investment growth is income tax-free.

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  • Your investment account balance is separate from your cash account balance. If you need to pay for a qualified expense that exceeds your HSA cash account balance, you may choose to liquidate a portion, or all, of your HSA investments. Any balances from your sold investments are automatically moved into your HSA cash account balance.

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*Investment threshold amounts may vary. Check with your employer or sign in to your account for more information.

Mutual fund investment options are made available through the services of an independent investment advisor. Shares are offered through Charles Schwab & Co., Inc., a registered broker-dealer. Orders are accepted to effect transactions in securities only as an accommodation to HSA and MSA owners.

Optum Financial is not a broker-dealer or registered investment advisor, and does not provide investment advice or research concerning securities, make recommendations concerning securities, or otherwise solicit securities transactions.
Advisory services provided by Betterment LLC, an SEC-registered investment adviser.

Brokerage services provided to clients of Betterment LLC by Betterment Securities, an SEC-registered broker-dealer and member of FINRA/SIPC. To the extent that this message is notifying you of the availability of a trade confirmation or account statement, this notification is being made by Betterment Securities.

Investments in securities: Not FDIC Insured • No Bank Guarantee • May Lose Value. Investing in securities involves risks, and there is always the potential of losing money when you invest in securities. Before investing, consider your investment objectives and Betterment LLC’s charges and expenses. Past performance does not guarantee future results, and the likelihood of investment outcomes are hypothetical in nature.

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Health savings accounts (HSAs) are offered or administered by Optum Bank®, Member FDIC, or ConnectYourCare, LLC, each a subsidiary of Optum Financial. HSAs are subject to eligibility requirements and restrictions on deposits and withdrawals to avoid IRS penalties. State taxes may apply. Fees may reduce earnings on account. Flexible spending accounts/arrangements (FSAs), health reimbursement arrangements (HRAs), Commuter and Parking Benefits, Adoption Reimbursement Plans, Tuitions Reimbursement Plans, Surrogacy Reimbursement Plans, Lifestyle Plans, COBRA Benefits, and all other account types are administered on behalf of your plan sponsor by Optum Financial, Inc. or ConnectYourCare, LLC (collectively, “Optum Financial”) and are subject to eligibility and restrictions. Please contact a legal or tax professional for advice on eligibility, tax treatment, and restrictions. Please contact your plan administrator with questions about enrollment or plan restrictions. Federal and state laws and regulations and the design of your plan are subject to change.

Self-directed mutual fund investment options are made available through the services of an independent investment advisor, or your plan sponsor. Discretionary advisory services are provided by Betterment LLC, an SEC-registered investment adviser, with associated brokerage transactions provided by Betterment Securities, member FINRA/SIPC. For details and disclosures visit betterment.com. Certain brokerage services are offered through TD Ameritrade, Inc., member FDIC/SIPC and a subsidiary of The Charles Schwab Corporation.  For details and disclosures, visit  www.tdameritrade.com. The Schwab Health Savings Brokerage Account is offered through Charles Schwab & Co., Inc., member FINRA/SIPC. For details and disclosures, visit schwab.com.

Orders are accepted to effect transactions in securities only as an accommodation to HSA owners. Optum Financial and its subsidiaries are not broker-dealers or registered investment advisors and do not provide investment advice or research concerning securities, make recommendations concerning securities, or otherwise solicit securities transactions.

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