The important connection between HSAs and a successful retirement

The important connection between HSAs and a successful retirement

What is an HSA?

A health savings account (HSA) is a tax-advantaged trust or custodial account created for the benefit of a qualified individual. HSAs can be an integral part of retirement planning since the funds can be invested long-term.

 

Health savings accounts are popular health benefit plans, but did you know they can also play a critical role in retirement savings?

Helping employees plan for retirement health care costs is critical to their long-term financial well-being. Fortunately, there’s a savings vehicle that can help solve for both current and future health care needs: the health savings account (HSA).

Use the insights and resources below to deepen your conversations with employers about health care costs in retirement and the potential uses of HSAs.

Need some help with your conversations? Use these resources.

Use with employers

For employers, HSAs make efficient use of your entire benefits package by covering both health and retirement.

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Use with employees

Track your HSA alongside your other retirement accounts for a better picture of your overall financial health.

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Calculate how much you may be able to contribute this year to an HSA.

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Answer a few quick questions to see if you meet the requirements for having an HSA.

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Three reasons to talk with your clients about the retirement benefits of HSAs

1. Health care is employees’ single biggest retirement expenditure.

Retirement health care costs are one of the most significant sources of concern. For good reason: The average healthy 65-year old couple retiring this year can expect to pay $363,946 (pay as much as $662,156) in lifetime Medicare and supplemental insurance premiums and out-of-pocket costs.1

2. Health savings accounts can be an integral part of a retirement plan.

In fact, HSAs are triple tax-advantaged and can help reduce employers' current health care costs. Yet, fewer than 40 percent of employers position the HSA as a retirement savings vehicle, though another 11% plan to do so.2 

3. Few people use health savings accounts as a retirement savings tool.

The majority of workers use their health savings account funds for current health care needs, large and small.3 Only 11% of people focus on saving their HSA funds for future health care expenses.3 There’s a need for more education and awareness of the value HSAs provide as part of a holistic retirement plan.

Use our Retirement Wellness Planner to connect your HSA with your other retirement accounts.

Use with employees

Track your HSA alongside your other retirement accounts for a better picture of your overall financial health.

icon of arrow pointing right to represent a link
icon of arrow pointing right to represent a link

Calculate how much you may be able to contribute this year to an HSA.

icon of arrow pointing right to represent a link

Answer a few quick questions to see if you meet the requirements for having an HSA.

icon of arrow pointing right to represent a link
1 HealthView Services, 2021 Retirement Health Care Costs Data Report.
2 2021 HSA Survey, Plan Sponsor Council of America.
3 Deemed "investors"; 2021 Midyear Devenir HSA Research Report, Sept 2021.

Principal® does not make available products related to health savings accounts.

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The subject matter in this communication is educational only and provided with the understanding that Principal® is not rendering legal, accounting, investment advice or tax advice. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, investment or accounting obligations and requirements.

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