Most Seniors Are Overlooking This Key Retirement Option

Most Seniors Are Overlooking This Key Retirement Option
Photo by Monkey Business Images /

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 folks in their 40s and 15% in their 50s have HSAs, according to the survey.

Why is this a big deal? Because HSAs offer advantages that are unique among retirement savings accounts.

Why you need an HSA

Yes, it’s true that HSA 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, HSAs can be a boon. One overlooked way to use an HSA 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.”

Find cheaper car insurance in just minutes

Getting a better deal on car insurance doesn't have to be hard. You can have The Zebra, an insurance comparison site compare quotes in just a few minutes and find you the best rates. Consumers save an average of $368 per year, according to the site, so if you're ready to secure your new rate, get started now.

Read Next
9 Great Amazon Finds You Can Buy for Less Than $5
9 Great Amazon Finds You Can Buy for Less Than $5

These products offer big value at a small price.

8 Ways to Cut Your Internet Costs Every Month
8 Ways to Cut Your Internet Costs Every Month

No matter what price you are paying for internet service, taking these simple steps can lower it.

Never Buy These 19 Things Online
Never Buy These 19 Things Online

The internet has changed how we shop. But for many things, you’re still better off buying the old-fashioned way.

View this page without ads

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

Get Started


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.

Trending Stories