INVESTING YOUR HSA FUNDS
A tax-advantaged way to accelerate your retirement savings
Your health savings account (HSA) is a powerful tool that helps you save money for current and future healthcare needs. But your HSA is more than just a spending account to pay for your out of pocket healthcare costs this year. You may not realize this, but your HSA is also a powerful investment vehicle!
Advantages of an HSA investment account
Once your HSA balance reaches the minimum balance requirement, you can begin using your HSA as a retirement planning tool by investing your HSA funds, just like a 401(k). Why should you use your HSA as a long-term savings and investment vehicle?
HSAs offer a triple-tax advantage money goes into your account tax-free, grows tax-free, and comes out tax-free. No other investment account offers this benefit!
If you’re like most people, you’re not saving enough for retirement, especially when it comes to future healthcare expenses. A 65-year-old couple can expect to spend $300,000 on out of pocket healthcare costs during retirement. Investing your HSA funds can help you prepare and save money for the future.
An HSA offers broader tax savings than any other investment account. Once you begin drawing funds from a 401(k) or IRA, you pay income taxes on all withdrawals. With your HSA, you never pay income taxes on withdrawals for qualified medical expenses
After age 65, you can spend your HSA dollars on anything, even non-healthcare expenses. You’ll simply owe income taxes on withdrawals for non-qualified expenses.
You can move funds from your investment account back into your HSA spending account at any time.
How much can you save?
Contributing the maximum amount to your account and minimizing withdrawals can help you stay on the path to achieving your health savings goals. Assume you start contributing to your HSA at age 25, contribute $3,600 every year until age 65, and earn an average return of 5% by investing your funds. If you do not make any withdrawals for medical expenses, by age 65 your HSA could potentially be worth more than $460,223.
*For illustrative purposes only. Savings calculations are hypothetical.
The balance in your HSA Investment Account is subject to investment risks, including fluctuations in value and the possible loss of the principal amount invested. Investing through the WealthCare Saver investment platform is subject to the terms and conditions of the Health Savings Account Custodial Agreement and any applicable investment supplement(s). For information regarding underlying investment expenses, earnings, and distributions, see the applicable investment prospectus and other publicly available information.
WealthCare Saver, a dba of Alegeus Technologies, LLC, is a licensed Non-Bank Custodian of HSA cash accounts.
CapFinancial Partners, LLC (“CAPTRUST”) is an investment adviser registered under the Investment Advisers Act of 1940. CAPTRUST acts as investment advisor with respect to the investments available in your HSA. In addition, you may choose to have CAPTRUST manage your HSA account on a discretionary basis.
DriveWealth, LLC, a registered broker dealer and member of FINRA and SIPC. SOC 2 Type 2, GDPR, CCPA compliant. Registered in all 50 U.S. states.