Investing my HSA Funds

[bean29]

I finally am in the process of moving my HSA funds over to Fidelity so that I can invest most of it.

I currently have $21,000 and deposit $179 a week.  I decided to leave about $3,000 in a MM fund so that I can pay any current medical expenses.

That leaves about $18,000 to invest.  Funds have been requested from the bank where the funds were, they have not yet been received by Fidelity.

I need to decide how to allocate my investment.  I was uncertain if I should chose a Growth Portfolio with 70% Stocks and some bonds, or the Aggressive Growth with 85% stocks.

So for the Growth Portfolio, Fidelity recomments the following:

Fidelity 500 Index Funds (FXAIX)                               39%
Fidelity U.S. Bond Index Fund (FXNAX)                       27%
Fidelity International Index Fund (FSPSX)                   14%
Fidelity Emergin Markets Index Fund (FPADX)               6%
Fidelity "Government Money Market Fund (SPAXX)        4%
Fidelity Mid Cap Index Fund (FSMDX)                           4%
Fidelity Small Cap Index Fund (FSSNX)                         4%
Fidelity Inflation-Protected Bond Index Fund (FIPDX)     2%

I am not sure about the high % of bonds.  and the International and emerging Markets funds.  Looking for some feedback on how to invest my $$.  I will be 60 in January.  I have the funds mostly earmarked to be used in retirement, so 5-10 years out.  We do have other investments too.

Thanks

[minnesotapaintlady]

Are you looking at a Target fund that includes all that?  Otherwise, rebalancing would be a PIA with all those funds.  Target funds are good, but the expense ratios will typically be higher.

FZROX (Fidelity Total Stock Market), covers all of those stock funds.  Bonus.  It's one of their Zero funds.  No fees whatsoever.

Then you just have to pick a bond fund if you feel you should have bonds as well.  I use FTBFX  (Fidelity Total Bond Index) in my traditional IRA at Fidelity. (not my HSA, I'm super aggressive with my HSA

[bean29]

Sept 8, 2023 10:21:17 GMT -5 minnesotapaintlady said:

Are you looking at a Target fund that includes all that?  Otherwise, rebalancing would be a PIA with all those funds.  Target funds are good, but the expense ratios will typically be higher.

FZROX (Fidelity Total Stock Market), covers all of those stock funds.  Bonus.  It's one of their Zero funds.  No fees whatsoever.

Then you just have to pick a bond fund if you feel you should have bonds as well.  I use FTBFX  (Fidelity Total Bond Index) in my traditional IRA at Fidelity. (not my HSA, I'm super aggressive with my HSA

with the S&P 500 fund you kind of have a natural selection of stronger funds.  The Total Stock Market Fund would not have that, so I am kind of leery to be 100% all in on a Total Stock Market Fund.  Why would rebalancing be a PIA, if you tell them to maintain the %'s they can periodically rebalance.  I do agree that it is more complex than I want.  I liked the smaller allocations for MId and Small Cap.  Maybe I will look to see if I can find any Boggleheads discussions on the subject tomorrow.  I will have to remember to take the I-Pad.

[minnesotapaintlady]

Sept 8, 2023 10:34:11 GMT -5 bean29 said:

Sept 8, 2023 10:21:17 GMT -5 minnesotapaintlady said:

Are you looking at a Target fund that includes all that?  Otherwise, rebalancing would be a PIA with all those funds.  Target funds are good, but the expense ratios will typically be higher.

FZROX (Fidelity Total Stock Market), covers all of those stock funds.  Bonus.  It's one of their Zero funds.  No fees whatsoever.

Then you just have to pick a bond fund if you feel you should have bonds as well.  I use FTBFX  (Fidelity Total Bond Index) in my traditional IRA at Fidelity. (not my HSA, I'm super aggressive with my HSA

with the S&P 500 fund you kind of have a natural selection of stronger funds.  The Total Stock Market Fund would not have that, so I am kind of leery to be 100% all in on a Total Stock Market Fund.  Why would rebalancing be a PIA, if you tell them to maintain the %'s they can periodically rebalance.  I do agree that it is more complex than I want.  I liked the smaller allocations for MId and Small Cap.  Maybe I will look to see if I can find any Boggleheads discussions on the subject tomorrow.  I will have to remember to take the I-Pad.

I'm not understanding this. The S&P is 80% of the market.  It is almost identical to a total stock fund with the exception of international and small and mid cap value...which is why those have been added in separately in the portfolio you have.  It essentially is creating a Total Stock Market fund by combining 5 separate funds.  If you want to see it, find a portfolio comparison tool and input those funds in those percentages vs a Total Stock Market one and the difference will be minuscule. It's just additional complexity for the same result.

eta:  There's a million threads on Bogleheads about which is better S&P or Total Stock Market, but here is one.

www.bogleheads.org/forum/viewtopic.php?t=342691

[bean29]

Sept 8, 2023 10:47:11 GMT -5 minnesotapaintlady said:

Sept 8, 2023 10:34:11 GMT -5 bean29 said:

with the S&P 500 fund you kind of have a natural selection of stronger funds.  The Total Stock Market Fund would not have that, so I am kind of leery to be 100% all in on a Total Stock Market Fund.  Why would rebalancing be a PIA, if you tell them to maintain the %'s they can periodically rebalance.  I do agree that it is more complex than I want.  I liked the smaller allocations for MId and Small Cap.  Maybe I will look to see if I can find any Boggleheads discussions on the subject tomorrow.  I will have to remember to take the I-Pad.

I'm not understanding this. The S&P is 80% of the market.  It is almost identical to a total stock fund with the exception of international and small and mid cap value...which is why those have been added in separately in the portfolio you have.  It essentially is creating a Total Stock Market fund by combining 5 separate funds.  If you want to see it, find a portfolio comparison tool and input those funds in those percentages vs a Total Stock Market one and the difference will be minuscule. It's just additional complexity for the same result.

eta:  There's a million threads on Bogleheads about which is better S&P or Total Stock Market, but here is one.

www.bogleheads.org/forum/viewtopic.php?t=342691

LOL, I read your link, and was pretty much leaning towards Total Stock Market, but they ended up saying returns are pretty similar between Total Stock market and S&P 500.  I will probably do Total Stock Market + some kind of Money Market Fund for a small amount that I will keep more liquid.  They are saying to keep the HSA invested as long as possible and fund your health care expenses from current earnigns if possible.  I was leery of the international funds, and that was the general consensus in your link.

[ArchietheDragon]

100% in fidelity 500 

[haapai]

54 years old.  95% in Vanguard 500 Index once the transfer to get out of that similar TIAA-CREF product with ten times the expense ratio goes through. 

The remaining 5% is currently in an international fund of some sort with expense ratios that I am too ashamed to mention.  It's getting moved into the Vanguard vehicle as soon as the previous transfer clears and the 'puter lets me do it without canceling the pending transfer. 

This is not my proudest moment.  On the other hand, I finally pulled the lever on investing most of the HSA three months ago and having a half of it invested in things with higher expense ratios than I care to mention hasn't hurt me nearly as much as not having it invested.   It did go up by quite a bit more than the money market option would have while half of it was invested in things that I now realize were mistakes.  I'm sorta glad that I had the courage to make those mistakes -- and fix them. 

[schildi]

Sept 8, 2023 12:04:27 GMT -5 ArchietheDragon said:

100% in fidelity 500 

I second that.

[bean29]

I have $22,267.68.  Funds just got to Fidelity.  I set up an order to invest $15,000.  I don't know how to set up an ongoing investment for my weekly contribution, and have not yet decided if I want part in a money market fund.  I spent too long today looking at this, so I will decide on a money market fund later this week.  Hopefully I can get someone from fidelity to walk me through it.  The chat box thing was really not helping me.  So glad I got input from MSN/YMAM crowd first.

 

[bean29]

One of my former work 401K’s was with Fidelity, so they called wanting to review my portfolio with me. So, he said my default investment is some sort of gov’t bond fund. He said it is one of best mm funds they have right now. My weekly deposit goes there.

So I am good for now. Might reallocate later in year.