Health Savings Accounts
The Most Tax-Advantaged Retirement Account Deserves Your Investment Attention
Billions In HSA Assets
$
0
million accounts
0
Billions in assets invested
$
0
of accounts invest
0
%
Healthcare Inflation Is 4-5%+. The Status Quo Is An Expensive Choice.
Health Savings Accounts (HSAs) hold $100 billion in assets1see Devenir research for reference., while 93% of accounts earn a negative real return since they don’t invest2Health Insurer Disclosures On Trend And Public Company Disclosures On Expected Long-Term Expectations..
Healthcare out-of-pocket costs for most are modest and highly correlated with age, gender, and coverage type.
Case Study: Zach Friedman
Goal: Invest my HSA balance for retirement medical expenses and understand my likely current healthcare coverage exposure1model notes and disclaimer
Zach, age 40 is enrolled in a typical healthcare plan.
- His likely annual out-of-pocket costs are $200 to $800, approximately $400 on average based on his age, gender, and plan selection.
- Current HSA balance of $20,000 sits idle in cash, earning a negative real return.
- With $200/month in HSA contributions, and a 5% real return on his invested balance, he could have $192,000 dollars by the time he is eligible for Medicare. More than enough to offset premiums and copays2https://www.fidelity.com/viewpoints/personal-finance/plan-for-rising-health-care-costs.
Read the model notes and disclaimer for more information.
Modeling Health Savings
Demographic Information
Age
Your current age
Gender
Current Health Plan
Gold plans typically have deductibles of around $1,500, Silver $2,500, and Bronze $4,000. Most are enrolled in Gold or Silver coverage.
Modeling Variables
Medical Utilization
Annual out-of-pocket cost scenario based on low (bottom 20%), average, and high (top 5%) users for current health plan and demographic info.
Expected Annual Out-of-Pocket Costs
Expected costs based on age/gender, and current health insurance coverage
$0
Current HSA Balance
Current HSA dollars saved
Annual HSA Contributions
Total dollars from you and your employer. $1,000 to $3,000 are the typical ranges. IRS has 2021 contributions caps for $3,600 for those under 55, and $4,600 for >55. Family contribution limits are 2x
higher.
HSA Investment
Contributions
Contributions
New dollars available for HSA investment, net of modeled out-of-pocket costs
$0
Long-Term Growth in HSA Contributions
Assumed annual increase in HSA investment contributions from now till age 65 (Medicare eligibility)
Real Annual HSA Return
Real rate of return (after assumed healthcare inflation of 4.5%)
In 5 Yrs
$0
In 10 Yrs
$0
Age 65
$0
*doesn't reflect tax savings
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