What to know if you’re nearing age 65 with an HSA: Some retirees have ‘meaningful’ balances
By Sarah O’Brien | Originally posted on CNBC
KEY POINTS
Assets in HSAs totaled $147 billion across about 39 million accounts at the end of 2024, according to research from Devenir.
As a group, people ages 60 to 64 own the most HSA assets, with $19.4 billion across 3.1 million accounts.
Here are some key things to know about HSA rules for people getting close to age 65.
Anyone who owns a health savings account is probably familiar with its generous tax advantages. If you’re nearing age 65, though, it’s worth making sure you’re aware of some key rules.
HSAs come with a triple tax benefit: Your contributions are made pre-tax, any growth is untaxed and withdrawals are tax-free as long as they are used for qualifying medical expenses. And while these accounts are more prevalent among younger generations, a growing number of people are reaching retirement with one in tow.
“More retirees are sitting on meaningful HSA balances without a clear plan for how to use them most effectively,” said certified financial planner Tom Geoghegan, founder of Beacon Hill Private Wealth in Summit, New Jersey.
Assets are highest in the 60-to-64 age group
Since HSAs were authorized in 2003 congressional legislation, their use has steadily climbed over the years, according to research from Devenir, an HSA provider. By the end of 2024, assets were $147 billion across about 39 million accounts — a year-over-year increase of 19% for assets and 5% for the number of accounts.
HSA assets are highest among people ages 60 to 64, with $19.4 billion across 3.1 million accounts, according to Devenir. That’s followed by the 55-to-59 age range, with $17 billion in about 3.5 million accounts.
At the same time, however, the number of HSAs is highest among younger age groups, with about 5.8 million among those ages 30 to 34 and about 5.3 million in the 35-to-39 age group. Assets in those accounts stand at $10.2 billion and $12.6 billion, respectively.
The use of HSAs is expected to keep increasing. The “big beautiful bill” that was enacted in July included provisions to expand access to HSAs, including by making more Affordable Care Act marketplace health plans HSA-eligible.
z‘No statute of limitations’ to repay yourself
You can only contribute to an HSA if you have a qualifying high-deductible health insurance plan. This year, the contribution limit is $4,300 for individuals and $8,550 for family coverage. In 2026, those limits will increase to $4,400 and $8,750, respectively. If you’re age 55 or older and not enrolled in Medicare, you’re allowed to contribute an additional $1,000 yearly.