Only 51 percent of Americans are in-the-know when it comes to Health Savings Accounts (HSAs)—a striking figure considering it includes financial advisors, asset managers and employers.
A joint report by LIMRA Secure Retirement Institute and Insured Retirement Institute (IRI) uncovered a widespread lack of knowledge among both workers and those involved in managing retirement savings with regard to HSAs and realizing their full benefits.
For instance, around 40 percent of Americans are under the false impression that an HSA functions as a “use it or lose it” type of fund, meaning that balances leftover at the end of the year are forfeited. Realistically, U.S. workers can build up HSA assets during their working years and then use them “to pay for health care and long-term care expenses in retirement”—a quite handy tool, if only the ins and outs were better-known.
Fortunately (in this rare instance), anxiety about health care and its associated cost has reached somewhat of a fever-pitch in recent years. Public discourse about health-related financial strain is commonplace. As a result, asset managers are increasingly discussing as much with retirement savings participants.
But while “nine in 10 advisors surveyed say they typically discuss health care or long-term care with clients…only seven in 10 have specifically addressed the use of an HSA,” according to the survey.
Around 96 percent of advisors surveyed admit they want to learn more about HSAs, and those who avoid discussing HSAs with clients point to insufficient expertise as the reason for doing so.
“As the onus of providing income during retirement is increasingly the responsibility of the individual, it is critical for the retirement income industry to drive consumer education on the value of participating in an HAS,” Cathy Weatherford, IRI President and CEO, said in a statement. “While the need for more education is clear, it is encouraging to see the continued growth of HSAs over the past decade and the increasing number of employers offering and seeking avenues to offer these accounts in their benefit packages.”