Am I missing out on the investment opportunities for being too cautious? I feel like with a kid it isn't worth the risk. Smart? Dumb? Any comments?
HSA is a little more difficult to start because unlike an FSA you can't spend until the money is in your account. So if you have lots of medical expense early in the year you will still be paying out of pocket. but if you can afford to put money in the HSA, do it. You don't need to max it out, just put in what you can afford. You can always increase it the 2nd year when you know you have a balance to fall back on in the beginning of the year. The restrictions on HSA are probably one of the biggest mistakes government is making, opening up the utilization would help the people become more self reliant and less dependent on insurance companies.
I already have an HSA. My company puts $3k in it every year, plus my contributions. I have a nice balance, but it is just in a cash account right now. I have the option to invest in several funds, but I haven't yet due to my fear of losses for an account for medical expenses.
With mine I can sell of the investment and have the cash back in the account in under a week. So there is no really big time crunch to come up with the cash to pay the bill. Anyway I pay the bill with a credit card to get the miles then reimburse myself the money out of the HSA, I have two months to get the money in the account.
I wouldn't invest the HSA money. Emergency savings is separate from medical money is separate from investment money. They all have different uses and you for sure don't want to put risk on emergency or medical funds. Don't want to possibly have them tied up when they are needed either. Just my opinion.
My employer will put $1600 in at the beginning of the year if I complete the requirements. I have an extra $50 come out of my paycheck for it. I didn't do that last year, and it really bit me early in the year.
One thing to consider. If your balance grows beyond what your maximum out of pocket expense limit is for a year, you could invest the balance of the account and be pretty secure. I have an HSA and fund it to the max each year. Unfortunately, we have had to use it to the point of not building up a large enough balance to invest. But, I certainly will when comfortable with it. I hate to have dead money laying around anywhere. This is assuming that your account is paying little to no interest on the funds as they sit.
I have 2 kids... thankfully I don't use health insurance much, and neither do they. I think it is tough to say it is right or wrong as a blanket statement. Everyone's situation is different. If you or the kids don't use it much, then I think it is a GREAT way to go. If you are sickly and use your health insurance a lot for chronic issues, I don't think it is as good of an option. if healthy and only utilizing health care for more "preventive" care, It is a no brainer to use.
