In many ways, Health Savings Accounts have been the "middle child" of retirement savings. For one thing, whatever attention big brother 401(k) doesn't get, baby sister ROTH IRA gets. On the other hand, HSAs generally have been viewed more as a health benefit rather than a retirement benefit.
But, you know, if you think about it, if you ask a lot of folks, they'll tell you their greatest retirement worry is paying for health care. Once they leave the cocoon of employment, they'll no longer have the benefit of using their company's health care plan.
Many people, for the first time, will have to shop for health insurance all by their lonesome. Think about it. If you have to shop for something for the first time, aren't you afraid what the cost might be?
Recommended For You
That's why many people infinitely smarter than I am see HSAs as a potential answer to this retirement health care anxiety, (see "Why Any Plan Sponsor Fiduciary Needs to Give HSAs Another Look," FiduciaryNews.com, Sept. 16, 2014). Only a fraction of those companies eligible offer HSAs (the company must offer a high deductible health plan – HDHP – to qualify).
Don't get me wrong. I'm not saying saving in HSAs should take priority over saving in 401(k)s (or even ROTH IRAs, for that matter). It's just that everything has its limits, and when those limits have maxed out, it's time to look for another opportunity.
HSAs represent just such an opportunity. Granted, the savings limits don't seem that compelling ($7,500 including catch-up), but it can add up as you don't have to spend it all right away.
Think about that. If an employee treats HSAs as a form of a retirement plan, save money in it, and invest it for the long term, that future retiree may just have at least made a dent in removing some of the "How am I going to pay for health insurance?" anxiety. Sure, it's not a cure-all, but, then again, nothing is. What it is, though, is just another arrow in the quiver. For the employee who seeks a more secure retirement. For the plan sponsor who wants to give employees a chance to seek a more secure retirement. And for the plan service provide who, by looking at a tool from perhaps a different perspective, allows the plan sponsor to discover the additional benefit that could give the employee a more secure retirement.
With so many potential winners, how could this idea lose?
See also: $1 million in your HSA account?
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Christopher Carosa
Chris Carosa has been writing a weekly article and monthly column for BenefitsPRO online and BenefitsPRO Magazine since 2011 and is a nationally recognized award-winning writer, researcher and speaker. He’s written seven books, including From Cradle to Retire: The Child IRA; Hey! What’s My Number? – How to Increase the Odds You Will Retire in Comfort; A Pizza The Action: Everything I Ever Learned About Business I Learned By Working in a Pizza Stand at the Erie County Fair; and the widely acclaimed 401(k) Fiduciary Solutions. Carosa is also Chief Contributing Editor of the authoritative trade journal FiduciaryNews.com and publisher of the Mendon-Honeoye Falls-Lima Sentinel, a weekly community newspaper he founded in 1989. Currently serving as President of the National Society of Newspaper Columnists and with more than 1,000 articles published in various publications, he appears regularly in the national media. A “parallel” entrepreneur, he actively runs a handful of businesses, including a small boutique investment adviser, providing hands-on experience for his writing. A trained astrophysicist, he also holds an MBA and has been designated a Certified Trust and Financial Advisor. Share your thoughts and story ideas with him through Facebook (https://www.facebook.com/christophercarosa/)and Twitter (https://twitter.com/ChrisCarosa).
