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Tips for Beginners and the Most Seasoned HSA Investor

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February 25, 2022 | Written by First American Bank Health Account Services

Are you an HSA investor? If you are, then you have a health savings account (HSA). You’ve heard about its investment potential, and you’ve read that an HSA has retirement-planning perks that a 401(k) and IRA don’t have. And you’re investing to grow your funds so they increase at a much higher rate than they would in an HSA’s cash account. But even the most savvy investors can get more out of their accounts.

HSA investment options

You can invest your HSA funds in an interest-bearing account or our standard mutual fund lineup. Savvy investors may opt for a self-directed Health Savings Brokerage Account (HSBA or brokerage account) powered by Charles Schwab*, giving you access to more than 8,500 mutual funds, stocks and bonds. With the brokerage account you have the power to:

Fine-tune your long-term health savings strategy.
Research and choose your investments.
Trade whenever it is convenient for you.
Pinpoint specific investments for your account using customizable online screener tools and select lists.
Monitor your progress at your own pace.

Simplify investment monitoring

Some HSA investors check their investments every day. Others prefer to check quarterly. The quality of your investment checks and balances matters much more than the frequency. No matter the timing, when looking over your investments, make sure to:

Evaluate the performance of your existing investments.
Review available fund options (since they can change).
Consider life changes that could influence your investment strategy.

If you participate in an HSA with First American Bank Health Account Services, you can easily check your investments by:

Logging into your online account, clicking the “Accounts” tab, then choosing “Investment Summary.” From there, you can view charts and graphs that show you how your investments have performed.
Logging into our FAB Health mobile app and click on “View HSA Investments.”

Adjust your HSA investor goals

Your financial needs can change, which may result in the need to adjust your investment goals. That’s natural, since an HSA is especially useful in preparing for retirement healthcare costs and the estimate for what retirees need to cover healthcare costs changes annually.

It’s important for an HSA investor to have tools and resources available to help you adjust your investment strategy. Our HSA investment guidance tool within your online account helps you set and achieve your investment goals, giving you the ability to:

Track your healthcare expenses.
Obtain a personalized risk assessment.
Access simulations to estimate your healthcare balance at retirement.

My HSA Planner shows your projected HSA spending for the next year, how HSA contributions can make an impact, and your projected investment balance over time. 

Lean on HSA investor automation for a hands-off approach

If you’re an HSA investor who is playing the “long game” with your investment strategy, we have good news! While there are bull and bear markets, the stock market has gone up much more often than it has gone down throughout its history. For example, the annual rate of return for stocks in the S&P 500 is 10 percent. Your investments fluctuate day to day and year to year but, over time, the good years have more than made up for the bad ones.

If you’re in it for the long haul, we make it easy for you to make the most of automation. Within your online account, you can set your HSA to automatically transfer funds from your cash account to your investment account (in $100 increments) when your cash balance reaches a threshold of your choosing.

To learn more

Disclosures

*A custodial management fee applies to the balances in your Investment Account. Funds in the Investment Account, as well as the Charles Schwab HSBA, are Not FDIC Insured, May Lose Value, and are Not Bank Guaranteed.

This information is for educational purposes only. It is not investment, legal or tax advice. For legal or tax advice, you should consult your own counsel.