I transfered my HSA account over to Lively back in June 2018, invested the entire balance in an index fund, and pretty much rode the market out over the course of the next few years until today.
I want to walk you through my decision for choosing Lively to invest my HSA funds and show you how much my investment has grown over time.
Why Lively?
Let’s start with the fact that back in 2018, I did extensive research and found Lively as the only HSA provider that offered 100% across the board no-fee HSA investing.
This means no monthly, yearly, service, or investment fees, minimums, or anything like that.
Other HSA providers like HSA Bank, HealthEquity, and Bank of America will charge you for their services.
HSA Investing with Lively
With an obvious new home for my HSA, I transferred my account to Lively and began investing.
I took a simple approach and bought 168 shares of SPTM which tracks the S&P index. At the time, these shares were around $35 a piece, but 2.5 years later SPTM was trading at $46.09 per share.
This appreciation in price allowed my account balance to grow from $5,731.60 which is what I invested out of my pocket to $7,743.12 where it was as of January 2021. This unrealized gain of over $2,000 is equivalent to a 35% adjusted return on my investment.
A Drawback to Lively HSA Investing
Now although I didn’t contribute to my HSA after 2018 because I quit my job to travel the world, the one major drawback with investing your HSA with Lively is that you must manually execute your investment trades, but this isn’t necessarily flaw with Lively, but rather a limitation of most HSA providers.
Basically the way it works is, you can choose a certain amount from your paycheck to be deposited into your Lively HSA savings account, and then you can set up an auto transfer from there into your Lively HSA investment account which is in reality a brokerage account with TD Ameritrade.
Then, remember how I bought the shares of SPTM?
Well, every two week or whatever the frequency of your paycheck is, you’ll need to login to TD Ameritrade and purchase additional shares with this cash balance.
A Workaround for Automatic HSA Investing?
Although I haven’t personally tried it, there is a documented way that you can automatically invest in mutual funds though Lively, so this would be a great set-it-and-forget-it option for some.
A possible downside to this method is that mutual funds tend to have higher fees than ETFs.
The Bottom Line
Everything is tracked and managed by Lively so there’s minimal record keeping that you need to do, and probably the best part is that all of your contributions, gains, and qualified distributions are tax free which is the number one reason that you should have an HSA account to begin with.
Now obviously, an HSA is supposed to be a savings account for medical purposes, so if this is your primary intention, you can simply keep your HSA funds in your Lively savings account and earn nominal interest there.
But as you can see from my personal experience, it’s well worth it to invest your HSA funds for the long term and if you can, max out your HSA contributions every year.
Still not sold on Health Savings Accounts? Check out my blog post on the benefits of HSAs here.
If you are sold on Lively, use my personal invite link and open your HSA today 👉 https://livelyme.pxf.io/YPxyK
