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What to Know about HSAs, Taxes & Retirement

Lively · September 11, 2017 · 3 min read


HSAs are often seen as health savings tool and they should be. However, HSA can provide deep financial flexibility and benefits, that are not only comparable to IRAs & 401ks, but that might even exceed those traditional retirement savings vehicles. Here is what you should know about HSAs, taxes & retirement.

Tax Savings

We love to talk about triple tax advantages! HSA benefits include tax-deductible contributions, tax-free interest/investment gains, and tax-free withdrawals (for qualified medical expenses) which means you can use tax-free money from your HSA to pay for health expenses.

With retirement health care costs now expected to exceed $275,000 in out-of-pocket medical expenses, HSAs provide the only way to save and pay for these expenses tax-free. You might be the picture of health today, but contributing to your HSA will increase your health tax benefits and long term savings.

Catch-Up Contributions

In 2017, HSA-eligible plans have a maximum annual contribution limit of $3,400 for single coverage and $6,750 for family coverage. But that doesn’t mean you need to stop, you might be eligible to contribute more tax-free dollars. Remember – a little can go a long way.

After the age of 55, individuals can contribute an additional $1,000/year, as long as they qualify and are not signed up for Medicare. Under those same conditions, if you and your spouse are over the age of 55, you can each contribute $1,000 more/year. You can see full details and qualifications here. These age qualifying contributions allow you (and your spouse) to further grow your HSA savings.

The Magic HSA Birthday: 65 Years of Age

After the age of 65, the value of an HSA greatly expands because it becomes eligible for non-health expenses. From a technical standpoint it becomes another savings account – just pay income taxes at that time with no penalty, just like an IRA or 401k if used for non-qualified medical expenses. This creates a unique way to save for health and personal wealth for retirement.

No Mandatory Distributions

Unlike a 401k or IRA, you can let your HSA grow well into your 70s, 80s, 90s, etc. because there are no mandatory distributions. This is a huge benefit of an HSA. No required distributions mean you can choose when and if to sell your long-term HSA investments creating more flexibility and financial options when compared to a 401k or IRA. You can decide, when and if to sell your HSA investments in retirement, as it works best for you without distribution restrictions that come with a 401k or IRA.

It’s surprising to think of an HSA one of the most advantageous and flexible retirement savings tool, but it’s hard to ignore the flexibility it provides, even when compared to traditional retirement vehicles like a 401k and IRA.  Frankly put, you will have more money to pay for health costs in retirement if you contribute to your HSA today!



Lively is the modern HSA experience built for—and by—those seeking stability in the ever-shifting healthcare landscape. By harnessing modern innovation and deep industry expertise, Lively is committed to bridging today’s savings with tomorrow’s unknowns. Unlike traditional institutions hindered by bureaucracy, Lively’s commitment extends beyond initial set up to providing dedicated, ongoing support and education for every step. So each HSA can reach its maximum potential with minimal headache.

piggy bank on pink background


2024 and 2025 HSA Maximum Contribution Limits

Lively · May 9, 2024 · 3 min read

On May 9, 2024 the Internal Revenue Service announced the HSA contribution limits for 2025. For 2025 HSA-eligible account holders are allowed to contribute: $4,300 for individual coverage and $8,500 for family coverage. If you are 55 years or older, you’re still eligible to contribute an extra $1,000 catch-up contribution.

comparing hsa versus fsa


What is the Difference Between a Flexible Spending Account and a Health Savings Account?

Lauren Hargrave · February 9, 2024 · 12 min read

A Health Savings Account (HSA) and Healthcare Flexible Spending Account (FSA) provide up to 30% savings on out-of-pocket healthcare expenses. That’s good news. Except you can’t contribute to an HSA and Healthcare FSA at the same time. So what if your employer offers both benefits? How do you choose which account type is best for you? Let’s explore the advantages of each to help you decide which wins in HSA vs FSA.

Benefits of HSA employer matching

Health Savings Accounts

Ways Health Savings Account Matching Benefits Employers

Lauren Hargrave · October 13, 2023 · 7 min read

Employers need employees to adopt and engage with their benefits and one way to encourage employees to adopt and contribute to (i.e. engage with) an HSA, is for employers to match employees’ contributions.

Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.



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