HSA Savings Can Exceed $1 Million According to Inspira Financial Report

OAK BROOK, IL / ACCESSWIRE / June 5, 2024 / Inspira Financial, a key provider of health, wealth, and retirement solutions, has published a report revealing that individuals can save over $1 million in a Health Savings Account (HSA) throughout their careers. For families, potential savings could double.

The report, created with the Employee Benefit Research Institute (EBRI), highlights the accumulation, tax advantages, and growth potential of HSAs. It underscores the significance of HSAs in covering medical costs in retirement, aside from Medicare and employer programs.

"Employers have reduced retirement benefits recently, and Medicare does not cover all healthcare expenses in retirement," noted Bryan Levy, Inspira's managing director of strategy. "This shifts the burden to retirees, affecting their savings."

Investment is crucial for HSA growth. With a 7.5% investment return, making IRS maximum contributions over 40 years, and $1,000 catch-up contributions from ages 55 to 64, individuals could retire with $1.03 million in their HSA. For families, this potential balance could reach $2.06 million because of higher contribution limits.

HSAs offer substantial tax benefits: contributions are tax-deductible, earnings grow tax-free, and withdrawals for qualified expenses are tax-free. However, only 20% of account holders fully exploit these advantages.