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HSAs: The Ultimate Retirement Savings Tool

When combined with a high-deductible health plan (HDHP), Health Savings Accounts (HSAs) let you keep the money you would otherwise spend on high insurance premiums. But beyond serving as a safety net for medical expenses, HSAs are one of the best tools for retirement savings.

While 401(k)s and IRAs offer tax-free contributions and growth, they lack tax-free distributions. Roth IRAs provide tax-free growth and withdrawals but not tax-free contributions. Flexible Spending Accounts (FSAs) offer tax benefits for medical expenses but are employer-owned and subject to a “use-it-or-lose-it” rule. HSAs stand out because they provide tax-free contributions, growth, and withdrawals, are fully owned by you, and roll over every year with no expiration. Plus, HSAs can be invested to accelerate growth. Start Health even offers in-house investment resources to help members prepare for the future.

View more Start Health HSA investment information here.

Why Invest in Your HSA?

Investing your HSA funds is one of the smartest financial moves you can make. HSAs allow tax-free investments in mutual funds, stocks, and bonds. While it’s important to keep some funds available for unexpected healthcare costs, investing the rest can yield significant benefits.

Unlike a traditional savings account that earns just 1-2% interest, HSA investment options—like those available through Start Health—can generate much higher returns. Since your HSA funds roll over annually, investment earnings compound tax-free, boosting your savings even more. HSAs also remain intact even if you switch jobs, and unlike 401(k)s, they do not require minimum withdrawals during retirement.

According to the Time Value of Money principle, a dollar today is worth more than the same dollar in the future due to its potential growth. By investing the maximum annual HSA contributions over 30 years at an average 7% return, a family could accumulate nearly $1 million in savings.

Getting Started with HSA Investments

So, how can you start investing your HSA?

To qualify to invest your Start Health HSA, you need a minimum balance of $2,000. Once you reach this amount, you can invest anything above it. While you don’t have to maintain the $2,000 balance after investing, you won’t be able to make new investments unless your balance reaches $2,000 again.

Keep in mind that investment balances cannot be used for direct payments or purchases with your Start HSA Card. If you need to use your investment funds for medical expenses, you must first sell your investments.

Don’t Wait—Start Growing Your HSA Now

There’s no better time to start investing your HSA. After age 65, you can even use HSA funds for non-medical expenses. * With tax-free growth and unmatched flexibility, HSAs are an essential tool for long-term financial security. Why leave money on the table when you could be growing your wealth for the future?

Note: Investing through Start Health incurs a monthly fee of $3.95, and HSA investments are not FDIC insured. Non-medical HSA withdrawals after age 65 are subject to income tax.