How Health Savings Accounts Can Support Retirement Savings
When planning for retirement, it is easy to focus on the fun parts like travel or hobbies, but one of the biggest expenses many people face is healthcare.
Costs continue to rise, and one estimate suggests that individuals may need over $170,000 for medical expenses in retirement.[1]
That is where a Health Savings Account, or HSA, can play an important role.
What makes Health Savings Accounts so valuable
Health Savings Accounts offer a way to save for both current and future medical expenses.
Here are a few key benefits:
- Contributions can be made pre-tax or may be tax-deductible.
- Your savings balance can grow over time, including interest or investment earnings.
- Withdrawals for qualified medical expenses are tax-free.
This combination is often referred to as a “triple tax advantage,” which make HSAs a powerful savings tool.
Another important feature is flexibility. Any unused funds roll over each year, so you do not lose what you do not spend. Over time, this helps build a dedicated savings pool for healthcare costs.
How an HSA works alongside your retirement plan
An HSA is not a replacement for your 401(k), but it can complement it. Your 401(k) is designed to help cover everyday living expenses in retirement. On the other hand, an HSA can help you prepare for healthcare costs both now and in the future.
Together, they can support a more complete approach to saving.
Greenspring Advisors
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[1] Fidelity Investments. “2025 Retiree Health Care Cost Estimate.” 30 Jul. 2025.
