Multiple IRAs or HSAs: What are the Benefits?
Patricia McCrystal
September 18, 2015
Individual Retirement Accounts (IRAs) and Health Savings
Accounts (HSAs) are powerful tools investors can use to save and invest for
retirement or qualified medical expenses, all on a tax-deferred basis. Many
investors only open one IRA or one HSA account, not realizing they can open as many
HSA and IRA accounts as they desire – and the potential benefits of doing so
are nothing to overlook.
You can further the autonomy of your retirement account by
opening a self-directed IRA or HSA. Self-directed accounts allow you to invest
in nearly any asset you desire (with the exception of life insurance and
collectibles). Self-directed IRAs or HSAs expand your investment horizons
outside of the stock market and into any asset market in which you may already
have knowledge and experience.
All HSAs and IRA account types have a yearly contribution
limit that encompasses every IRA or HSA account you own; meaning your
contribution limit remains the same regardless of how many accounts you open.
However, there are strategic benefits to opening multiple retirement and HSA
accounts. Multiple accounts allow you to maximize investment opportunities and
diversify your retirement portfolio. Investing in more than one asset class provides
autonomy from the potential volatility of any single asset market.
If it helps you to calculate potential returns for each
asset, you may want to keep your assets in separate IRA accounts. Some
investors prefer to open an IRA or HSA for every asset market in which they want
to invest. Multiple IRA accounts can help you keep your assets organized in a
way that makes sense to you. Additionally, if one or more of your IRA assets
has more liability risk associated with it, your attorney may advise you to keep
that asset in a separate IRA.
It’s logical to assume that multiple accounts would mean
paying more in fees. However, the
reality is that each new account with New Direction only means a $50, one time
fee to set up the new IRA. In almost
every case, the total fees thereafter are the same, whether you have one
account or ten.
For instance, if you have an old 401(k) invested in publicly
traded securities, you can keep some of the 401(k) funds with its current provider, and open a
self-directed IRA with New Direction to diversify and invest in alternative
assets like real estate, private equity, or both – the combinations are
limitless.
For HSAs, a tactic some investors may prefer is owning a “liquid”
HSA with the amount of money he or she feels comfortable with, in the event of
a medical emergency. With the money over and above the “liquid” contingency,
investors can open one or more self-directed HSA accounts to invest in specific
asset markets for long-term returns on a tax-deferred basis; thereby creating
money for a lifetime’s medical expenses. Investors may have an HSA invested in
stocks and bonds, and other accounts invested in precious metals or private
lending; among many other asset options.
To learn more about opening self-directed IRA and HSA
accounts, feel free to call New Direction or visit us online at www.ndira.com.
