This investing move is the ‘holy grail of retirement planning,’ advisor says

As open enrollment arrives, millions of Americans face key decisions, such as picking health insurance. If the plan comes with access to health savings account, or HSA, contributions, you could use the funds for long-term investments, experts say.

While most workers spend HSA money on yearly out-of-pocket health expenses, a small percentage invests the balance, which can grow tax-free for future medical costs.

“The plan is to go into retirement with a six-figure HSA,” said certified financial planner Dan Galli, owner of Daniel J. Galli & Associates in Norwell, Massachusetts. When coupled with other Roth and after-tax retirement funds, “this is the holy grail of retirement planning,” he said.

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More than 59 million Americans had an HSA as of Dec. 31, 2024, according to a survey from Devenir, a company that provides HSA investment solutions and research, and the American Bankers Association’s Health Savings Account Council. The survey polled the top 20 HSA providers.