Many Seniors Overlook This Unique Retirement Option

senior without an hsa
Photo by Drazen Zigic / Shutterstock.com

A health savings account is one of the best ways to shore up finances during your golden years. Yet, just a tiny percentage of seniors make use of these accounts.

A mere 8% of people in their 60s and 4% of those in their 70s currently have HSAs, according to a recent survey by TD Ameritrade.

The numbers aren’t much better for folks approaching their senior years. A scanty 16% of people in their 40s and 15% in their 50s have HSAs, according to the survey.

Why is this a big deal? Notably, it’s because HSAs offer advantages that are unique among retirement savings accounts.

Why you need an HSA

Yes, it’s true that HSAs are not strictly “retirement accounts.” In fact, HSAs can be used by savers across the age spectrum, provided they qualify for one. (The main requirement to qualify is that you are covered by a high-deductible health insurance plan.)

But as we point out in “5 Reasons to Use a Health Savings Account as a Retirement Fund,” savvy savers can use HSAs to supercharge their retirement savings.

For starters, HSA offer triple tax advantages:

  • You get a tax deduction for each tax year for which you contribute money to an HSA.
  • The money grows tax-free.
  • You get to withdraw the money tax-free, provided that you use it for qualified health expenses.

As we noted in the story, this makes HSAs unique:

“In essence, if you use HSA money to pay for health care expenses, it’s never taxed. Never. It’s tough to think of any other savings vehicle that offers such a powerful combination of tax incentives.”

Since health care expenses often are a major burden during retirement, HSAs can be a godsend, possibly helping you to save tens of thousands of dollars — or more — on health costs during your golden years.

And even if you luck out and remain healthy during retirement, an HSA can be a boon. One overlooked way to use one is as a sort of alternative IRA. Again, from our story:

“Once you reach the age of 65, you can withdraw your HSA funds for any reason. Just as with a traditional IRA, you will pay income taxes on the withdrawal at that point. However, you will not pay any penalties.”

Is your curiosity piqued? Then read more about HSAs in “3 Great Reasons to Set Up a Health Savings Account.”

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
17 Amazon Finds Under $20 That Will Organize Your Life
17 Amazon Finds Under $20 That Will Organize Your Life

We’ve rounded up must-have products to help you get your ducks in a row.

The 5 Worst Home Upgrades for the Money
The 5 Worst Home Upgrades for the Money

These home improvement projects basically never pay off.

3 Reasons You Can’t Rely on Medicare Alone
3 Reasons You Can’t Rely on Medicare Alone

Counting on Medicare to cover health care costs can jeopardize your retirement plans.

9 Foods You Should Never Buy Again
9 Foods You Should Never Buy Again

Make the wrong food choices, and you can ruin your health — and possibly shorten your life.

17 Surprising Things You Can Clean in a Dishwasher
17 Surprising Things You Can Clean in a Dishwasher

It’s often easier and faster to put these household items in the dishwasher than to clean them by hand.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

How to Buy Gas At Costco Without a Membership
How to Buy Gas At Costco Without a Membership

The warehouse club often has some of the cheapest gas in town. Here’s how you can get it as a nonmember.

10 Things to Stop Buying If You Want a Clutter-Free Home
10 Things to Stop Buying If You Want a Clutter-Free Home

If you like to keep things simple, avoid these purchases.

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

Vacuums from this brand can last a half-century, if not longer — and they’re hot on the resale market.

A Simple Way to Silence Robocalls Today
A Simple Way to Silence Robocalls Today

A few steps can keep your phone from ringing when a spammer calls.

This Company Makes the Best Tires in America
This Company Makes the Best Tires in America

Driver satisfaction with tires is at an all-time high, but one brand stands out.

This Health Issue Can Hint at Dementia Years in Advance
This Health Issue Can Hint at Dementia Years in Advance

One type of pain is especially associated with cognitive decline.

Can I Switch to Spousal Social Security Benefits When My Ex Dies?
Can I Switch to Spousal Social Security Benefits When My Ex Dies?

Knowing when to claim can help you maximize benefits.

Medicare Will Not Cover These 6 Medical Costs
Medicare Will Not Cover These 6 Medical Costs

Don’t let these health care expenses catch you off guard in retirement.

8 Things You Should Always Buy on Amazon
8 Things You Should Always Buy on Amazon

The giant retailer shines when it comes to these things, from basics to hard-to-find specialty goods.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

12 Deep Discounts Available on Amazon This Friday
12 Deep Discounts Available on Amazon This Friday

These items are steeply discounted — but the deals won’t last long.

5 Ways to Fill Your Pantry With Free Food
5 Ways to Fill Your Pantry With Free Food

Anyone can take advantage of these resources.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

6 Reasons You Should Stop Hiding Cash at Home
6 Reasons You Should Stop Hiding Cash at Home

Stashing money around the house is anything but harmless.

5 States With the Worst Health Care for Retirees
5 States With the Worst Health Care for Retirees

All of these states are located in the same region of the nation.

Beware This Hidden Ingredient in Rotisserie Chicken
Beware This Hidden Ingredient in Rotisserie Chicken

Something foul may lurk in those delicious, ready-to-eat birds.

36 Things That Will Be Obsolete Soon
36 Things That Will Be Obsolete Soon

The writing is on the wall for dozens of things we have grown up with.

5 Products You Should Never Buy Generic
5 Products You Should Never Buy Generic

Sometimes the brand-name version is clearly superior.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.