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Boost your retirement income with HSA savings

An HSA is a hassle-free tool to help you prepare for future health care costs and retirement, giving you that cushion when you need it.

Your tool for retirement savings

Have you ever thought of your HSA as a tool to boost retirement savings?

​An HSA isn’t just to pay for medical expenses — it is a long-term investment tool that can help you meet your retirement goals.

Enjoy a lifetime of smart savings​

With an HSA, you have money set aside for your medical expenses, so you can avoid dipping into retirement accounts intended for regular expenses.

Plus, after turning 65, you can use your HSA funds for non-qualified expenses. You’ll just pay ordinary income tax on those expenses.​

More tax benefits than other retirement accounts​

With more tax benefits than other retirement accounts, HSAs are a powerful way to build savings for retirement: ​

  • Withdrawals for qualified medical expenses are income tax-free​.
  • All contributions to an HSA are income tax-free​.

Are you prepared for health care costs in retirement?

You may think of your HSA solely as a way to pay for qualified medical expenses, but did you know you can also use it as a savings tool?

Use our health savings checkup tool

How much will you need to cover your medical costs in retirement? Use our retirement checkup tool to make sure you're covered.

Calculate your costs

Make a catch-up contribution

Did you know, once you turn 55, you can contribute an additional $1,000 each year to your HSA, called a catch-up contribution?

Make a contribution

Accelerate your financial wellness

Once your HSA reaches a certain balance, you can potentially accelerate your savings by choosing to invest a portion of your HSA.

View investing options

Fill in the gaps of medical costs

HSAs can cover premiums, deductibles, copays and coinsurance in retirement, as well as hundreds of other qualified expenses.

View qualified expenses

HSA retirement guide

HSAs and Medicare

HSAs and Medicare work together to help you in retirement. Once you enroll in Medicare, you can no longer contribute to your HSA, but you can still use your HSA to pay for qualified medical expenses, including Medicare premiums.

HSAs cover premiums, deductibles, copays and coinsurance for:​

  • Part A (hospital and inpatient care)​
  • Part B (doctor and outpatient care)​
  • Part D (prescription drugs)

Maximize your savings by investing

Investing HSA dollars has many potential tax benefits and can be an additional way to save for long-term health care expenses and financial goals.

Frequently asked questions about HSAs and retirement

No. You can open and contribute to an HSA at age 65 or later as long as you meet HSA eligibility requirements, which are:

  • You’re covered on an HSA-qualified medical plan
  • You’re not a tax dependent of someone else
  • You don’t have any conflicting coverage (including enrollment in Medicare). Turning age 65 does not, in and of itself, preclude you from remaining HSA-eligible absent any disqualifying coverage.

Yes. Medicare doesn’t offer an HSA qualifying option. You can’t make contributions to your HSA for any months after you enroll in any part of Medicare, even if you’re also covered on an HSA qualifying plan.

Yes. Once you turn 65 or meet Social Security’s definition of disabled, you can take distributions for items that aren’t HSA-qualified without incurring the 20% additional tax (penalty) that is otherwise assessed on non-qualified medical expenses.

However, distributions for non-eligible expenses are included in your taxable income, putting these withdrawals on par with taxes on distributions from a traditional 401(k) or traditional IRA.

You currently have diverse investment options in your HSA, including self-directed mutual funds and digitally managed investments from Betterment. You can choose to invest based on how experienced you are and how involved you want to be in selecting your investments.

I want help investing and don’t want to spend a lot of time managing my portfolio. Can I get help investing?

You may choose to have Betterment manage your investment funds. Betterment is an independent online investment advisor and combines low-cost, tax-efficient investment strategies with technology and personalized advice to help you pursue your financial goals.

Once you answer a few brief questions about your investment goals and priorities, Betterment will build a personalized portfolio of exchange-traded funds (ETFs) with investment mixes and risk levels that are suitable for you.

I have some investment experience and prefer mutual funds. Can I choose my own investments?

You may choose from among a number of pre-selected mutual funds from nationally recognized fund families. These have been selected to offer a broad and diverse range of investment objectives, with high Morningstar ratings and some of the lowest expense ratios in the industry.

Read the fund’s prospectus carefully before investing. It contains information about a fund’s investment approach and management fees. Links to a prospectus and Morningstar report are provided for each mutual fund on your mutual fund investment page, so the information is at your fingertips.