Seasons Greetings,Terry! I would like to transfer money out of an IRA that's paying less than 1% to an HSA since we meet the requirements of having one. Is this better than just taking the funds from a regular checking account? We are both retired so cannot make contributions from our paychecks.

Terry Says:

Well, you simply can’t do that!  You can’t take money out of your IRA without paying taxes.  You can’t contribute to an HSA unless you have a “sponsored product” that includes underlying high deductible health insurance — and if you’re retired you are likely on Medicare and don’t need that insurance.  You’ve just got a lot confused.

If your problem is that you’re “only” earning 1% on your IRA, you can move that — do a direct rollover from your current custodian to a new custodian like Fidelity or Vanguard.  Of course, you would only do that if you want to invest more aggressively, which you could do in a stock market fund.  And then you could get a much higher return — OR you could LOSE a significant portion of your IRA!

The 1 percent you are earning now is about the maximum you can get without taking more risk — no matter what any salesman promises.  Think about that before you make a move!  If you can’t afford to lose ANY money stick with that conservative investment hou already have.