Just as retirement burdens (and expense) are now shifted from employer to employee, so too are health care costs. Health savings accounts help individuals prepare for both.
The video titled “How Quickly Are HSAs Growing in the Retirement Plan Space? Eric Stevenson Explains.” features an interview between 401(k) Specialist and Eric Stevenson from Nationwide at the NAPA 401(k) Summit. They discuss the rapid growth of Health Savings Accounts (HSAs) within the retirement plan space.
Key Points:
- Growth of HSAs: HSAs have been growing rapidly at a rate of about 20% per year over the past few years. By 2020, the total amount in HSAs was expected to increase from $54 billion to $78 billion.
- Shifts in Healthcare Costs: There has been a significant shift in healthcare costs from employers to employees, similar to the shift seen in retirement plans from defined benefits to defined contributions.
- Education Curve: Despite the growth, there is still a significant education curve for both employees and advisors regarding the benefits and use of HSAs.
- Health and Wealth Connection: HSAs are seen as a powerful tool for retirement because they address retirees’ top concern—healthcare expenses. These accounts are beneficial due to their triple tax advantage.
- Investment Options: Many employees are not fully utilizing their HSAs by leaving money in cash accounts. However, Nationwide’s HSA offers a lineup of investment funds, including target-date and large-cap funds, which can multiply the benefits.
- Potential for Increased Contribution Limits: There is some discussion about potentially increasing the contribution limits for HSAs, but nothing has been decided yet.
You can watch the full video here.
