How a Health Savings Account Can Complement Your Retirement Savings Account

For most people, a 401(k), 403(b) or other workplace retirement saving account is one of the most valuable savings tools available to help prepare for the future. But there is another account that deserves just as much attention: the Health Savings Account, or HSA. Available to individuals enrolled in eligible high-deductible health plans, HSAs offer a combination of benefits that are difficult to match.

The Triple Tax Advantage

HSAs are often called the only account with a “triple tax advantage.” First, contributions are typically made with pretax dollars, which can reduce your taxable income. Second, any investment earnings grow tax deferred. Third, withdrawals are tax-free when used for qualified medical expenses. By comparison, traditional workplace retirement account contributions are made with pretax dollars and grow tax deferred, but withdrawals in retirement are generally taxed as ordinary income.

Better Together

That doesn’t mean you should choose one account over the other. Instead, think of your HSA and workplace retirement account as complementary tools that can work together. Although annual contribution limits for HSAs are much lower than those for workplace retirement plans, healthcare is often one of the largest expenses retirees face. Building dedicated savings for future medical costs can help protect your retirement income later. In fact, once you reach age 65 and enroll in Medicare, your HSA savings can be used to pay your Medicare premiums.

Don’t Forget the Investment Potential

Another advantage many people overlook is that HSAs are not just savings accounts. Many HSA providers allow you to invest your balance in mutual funds and other investment options, much like a 401(k). Over time, those investments may benefit from the power of compounding and potentially grow significantly. If you can afford to pay all or a portion of your current healthcare expenses out of pocket, consider allowing the balance of your HSA savings to remain untouched for the long term.

Remember that retirement planning isn’t just about replacing your paycheck. It’s also about preparing for future healthcare costs—and an HSA can be a powerful way to do both.

Informational Sources: Voya: “How an HSA Can Enhance Your Nest Egg” (April 30, 2025); Fidelity: “5 Ways HSAs Can Help With Your Retirement” (October 16, 2025).

This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.

HUB Retirement and Private Wealth employees are affiliated with and offer Securities and Advisory services through various Broker Dealers and Registered Investment Advisers, some of whom may or may not be affiliated with HUB International. HUB International owns the following Registered Investment Advisers: HUB Investment Partners; Global Retirement Partners, LLC; and RPA Financial. Additional information for each individual HUB International Registered Investment Advisor may be found in the respective Form ADV available on the SEC’s IAPD website at https://adviserinfo.sec.gov. Insurance services are offered through HUB International.