It is possible to collect 1 million US dollars in special health savings accounts in retirement, according to a new analysis with several major restrictions.
You have to start young to contribute the maximum every year and leave the money untouched for decades instead of spending it on medical needs.
Enable that people are known as HSAs who put people aside for health and medical care.
To open an HSA, you must have a certain type of health plan with a high deductible – an amount that you have to cover from your pocket before paying out the insurance company. The money can be saved or invested to grow tax -free and is tax -free if it is spent on authorized care or products. (The federal government does not tax the accounts, but some states evaluate state taxes.)
Due to their robust tax advantages, HSAs are later regarded as a valuable instrument for saving for health needs in life, including costs that are not covered by Medicare, the Federal Health Plan for the elderly. HSA funds can also be spent after 65 years without punishment for non -medical costs. The money is taxed as a decent income.
The new analysis of the Employee Benefit Research Institute, a non -profit group, goes out for people aged 55 and over) and continues these contributions up to 64 years without withdrawal, “regardless of whether the person uses any health services”. It is also assumed that the funds will be invested and earn a return of 7.5 percent.
With lower returns or less savings years, the total number would be less. With a return of 5 percent, the total savings would be around $ 540,000 and 2.5 percent and $ 298,000. The latest estimates of the average savings that are required to cover health costs in retirement are between 165,000 and $ 184,000 for one person, depending on variables such as the health status and the type of Medicare Plan or other health insurance, which the person has.
The catch of saving so much in an HSA is of course the difficulty to train annual contributions and to leave the money alone for four decades and pay for the necessary care by other means. Many account holders use HSAS as if it were a checking account to pay current care and not for long -term savings. According to Devenir, an HSA investment company, 47 percent of the HSAs financed in 2023 had withdrawals. From mid -2024, only 9 percent of all accounts invested at least part of their balance.
Paul Fronsin, director of health services, research at the institute and author of the analysis, said that the report illustrates the potential of HSAS if someone has fully exploited it – but not everyone could.
“I don't think it's realistic for the average person,” he said. “You have to have enough money to spend contributions and many people don't.”
HSAs have been criticized by some groups who mainly benefit wealthier Americans who can afford to invest their contributions and at the same time pay the medical costs out of their own pocket. The accounts were introduced more than 20 years ago, and according to Devenir, more than $ 137 billion were kept in around $ 38 million from mid-2024.
Together with the prevalence of health plans with high self -retained, the accounts have grown to pay for medical care, said Andrea Ducas, Vice President of Health Policy at the Center for American Progress, a liberal thought factory.
“If you have fewer than 400 US dollars of savings and a deductible of 5,000 US dollars, what does this health insurance actually mean for you?” she said.
In 2024, 21 percent of people with professional health insurance were in HSA-capable, with high-deductible health plans, according to KFF, a non-profit health research group, from 14 percent a decade ago. However, some studies indicate that many plans inscribed in such plans do not use to save for health care.
Nevertheless, various legislative proposals would expand the availability of the accounts. A Republican laws introduced in January would expand the type of insurance plans that are suitable for HSAS and increase the annual contribution limits in order to better reflect the potential costs of the account holder.
Tax Foundation, a research group that generally prefers lower taxes, has proposed to eliminate tax benefits for HSAS and to say goodbye to so -called universal savings accounts, which could not only be used for health care for a variety of purposes, not only for the Health care. The accounts could behave similarly as in the Roth individually retirement accounts that do not offer tax benefits for contributions but provide tax-free withdrawals (if certain requirements are met). The foundation has argued that universal accounts are more flexible and “fiscal” and that they can help to simplify the current patchwork of complex, tax accounts that can master savers.
A list of ideas among the Republicans of Republicans of Republicans of Republicans from the house contained an article with universal accounts. Alex Cyriac, managing director of Live, a financial technology company that offers HSAS, described the discussion about universal accounts as a “topic of conversation”, but said that the removal of such accounts was unlikely.
“I think the likelihood is quite low,” said Cyriac, said Cyriac, especially because so many Americans have it.
Another draft law that was proposed with two-party support would create a calculation costs for red types-like HSAS, but for people with low or non-deductible health plans.
Here are some questions and answers about health savings accounts:
Can I take my HSA with me if I change the job?
Yes. The accounts move with them when they change employers, in contrast to other work position options such as flexible health issues, and there is no deadline for spending the money.
What is the minimum deduction for HSA health insurance?
For 2025, an HSA-religious health plan must have a deductible of at least $ 1,650 for individual coverage and $ 3,300 for family coverage.
What is the deadline for an HSA contribution for 2024?
You can make a contribution until this year's tax registration period (April 15 in most states, with later deadlines in disaster areas). If you make a contribution to tax year 2024 this year, the maximum contribution is $ 4.150 for individuals and $ 8,300 for families. (People aged 55 and over can contribute an additional 1,000 US dollars.)