Your HSA and retirement: Top 3 tips to maximize your savings

A health savings account (HSA) can act as a retirement savings account. Learn how to use your HSA to work toward your retirement goals.

To see if an HSA is right for you, visit Further℠ (formerly SelectAccount®).

Learn more about an HSA

 

1. Fund your HSA early

Contribute the most allowed to your account at the beginning of each year. Even though you have until you file a tax return to make HSA deposits, starting right away each January gives you more time to take advantage of your HSA's tax-free growth. Over the years, you could get tens of thousands of additional dollars with this strategy alone.

2. Wait to withdraw from your HSA

Delay taking money from your HSA for as long as possible. Pay for your medical expenses out of pocket and leave your HSA money to grow tax free. Then pay yourself back from your HSA in the future for those eligible medical expenses. Be sure to save your receipts. Check with your HSA to see if you can scan your receipts into an electronic archive.

3. Use your HSA to invest

Use a portion of your HSA balance to buy mutual funds or other investments that offer growth potential.*

Example:

A 45-year-old couple could have $185,215 to $263,200 EXTRA in their HSA when they retire by using these strategies. Here's how:

They deposit $6,750 annually to their HSA for 20 years and earn a 6 percent return on their HSA investments:*

  • They have $2,000 a year in eligible heath expenses.
  • Each year, they take out money from their HSA to pay themselves back.
  • In 20 years they'll have $185,215 in their HSA as they begin retirement.

If the same couple delays taking out the $2,000 each year, paying their health care expenses out of pocket:

  • They'll have $263,200 in their HSA at age 65.
  • They then pay themselves back for eligible accumulated medical expenses that they did not pay with or take a reimbursement from their HSA plan in years past.
  • They'll have $223,200 in their HSA.

More about HSAs

6 benefits of choosing an HSA 
7 ways to save on health care
How a Health Savings Account works
Different types of medical spending accounts

*The 6 percent rate of return is for illustration only. Actual returns will vary. Investing in mutual funds involves risk, including possible loss of capital.

This is general information about how plan benefits work. Review the Summary of Benefits and Coverage and your specific health plan benefit booklet for information about how your plan works.

It’s up to you to always check if your provider is in your health plan network before you receive services. Not all providers are in every network. You may pay more or for all of your healthcare costs if your provider is out of your network or does not have a contract with Blue Cross (this is called a non-participating provider). You can verify if your provider is in your network by calling customer service at the number on the back of your member ID card.

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