Why HSAs Are a great 401(k) Fit
HealthSavings Administrators’ Pat Jarrett clues us in on all the benefits HSAs provide.
In this 3-minute interview from the FI360 Conference in Nashville, John Sullivan of 401k Specialist speaks with Pat Jarrett, founder of Health Savings Administrators, about the evolving role of Health Savings Accounts (HSAs) in the retirement planning landscape.
Jarrett begins by discussing the “shoebox” strategy—an IRS-sanctioned method that allows individuals to pay out-of-pocket for medical expenses, save the receipts indefinitely, and reimburse themselves tax-free from their HSA at any point in the future. This approach enables tax-deferred growth of HSA funds while retaining flexibility for future healthcare costs.
He emphasizes that there’s no expiration or cap on how long receipts can be stored or how much HSA funds can grow, making HSAs a powerful tool for long-term tax-advantaged savings. Jarrett also highlights the growing relevance of HSAs due to the unsustainable rise in healthcare costs and the shift toward high-deductible health plans (HDHPs), which encourage consumers to ask more questions and seek cost-effective care.
Despite HSAs existing for over a decade, Jarrett notes that adoption remains surprisingly low—only about 20 million Americans use HSAs out of roughly 170 million insured. He sees this as a significant opportunity, especially for financial advisors who can help clients invest unused HSA funds instead of letting them sit in cash and lose value over time.
Jarrett concludes by positioning HSA investment as part of a fiduciary responsibility for advisors, advocating for more proactive use of these accounts in retirement strategies.
SEE ALSO:
4 Important Findings About HSA Savers
A Critical HSA Liability (and Opportunity)
What Health Care Confusion Means for HSA’s Future
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of 401(k) Specialist and Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots. Experienced financial services content executive specializing in creative new media delivery. He joined the American Retirement Association in 2023 as Chief Content Officer, overseeing communications for the organization, as well as its sister organizations.
