Anyone who owns a health savings account is probably familiar with its generous tax advantages. If you’re nearing age 65, though, it’s worth making sure you’re aware of some key rules.
HSAs come with a triple tax benefit: Your contributions are made pre-tax, any growth is untaxed and withdrawals are tax-free as long as they are used for qualifying medical expenses. And while these accounts are more prevalent among younger generations, a growing number of people are reaching retirement with one in tow.
“More retirees are sitting on meaningful HSA balances without a clear plan for how to use them most effectively,” said certified financial planner Tom Geoghegan, founder of Beacon Hill Private Wealth in Summit, New Jersey.
Since HSAs were authorized in 2003 congressional legislation, their use has steadily climbed over the years, according to research from Devenir, an HSA provider. By the end of 2024, assets were $147 billion across about 39 million accounts — a year-over-year increase of 19% for assets and 5% for the number of accounts.
HSA assets are highest among people ages 60 to 64, with $19.4 billion across 3.1 million accounts, according to Devenir. That’s followed by the 55-to-59 age range, with $17 billion in about 3.5 million accounts.
