As you know, when you enroll in one of our Consumer Driven Health Plans (CDHPs), you can open a Health Savings Account (HSA) through HSA Bank. An HSA is a great way to save on healthcare expenses. You can pay for eligible medical, dental, vision and pharmacy expenses with tax-free dollars — now and in the future. 

The account also offers triple tax advantages: Contributions are tax-deductible,1 earnings are tax-free, and you pay no taxes on withdrawals when using them for qualified medical expenses.

But did you know that your HSA is also a great retirement savings vehicle? 

How to Grow Your Retirement Savings

Financial experts generally suggest keeping two to three years’ worth of routine medical expenses in your HSA. Then, consider investing any excess HSA funds for potential growth for these two reasons:

  • Prepare for healthcare costs in retirement. Doing all you can to get ahead of the inevitable rise in healthcare costs is smart. In fact, a 65-year-old couple retiring today may need as much as $325,000 in savings to cover Medicare premiums and out-of-pocket costs.2 Investing your HSA funds gives your money the opportunity to grow. It compounds over time, just like a 401(k) or Individual Retirement Account (IRA).
  • Use your HSA funds for non-healthcare expenses after age 65. For these future withdrawals, you’ll pay only ordinary income tax with no other penalty — just like withdrawals from your 401(k) and IRA. And since an HSA isn’t subject to required minimum distributions, it can be a compelling option as an overall retirement savings vehicle. (Note: Nonqualified withdrawals made before age 65 are subject to ordinary income tax plus a 20% early withdrawal penalty.)

To help your HSA grow faster, you can invest funds once your balance reaches $1,000. You may choose one of the self-directed investment options from Devenir or TD Ameritrade. Only HSA funds above $1,000 in your HSA Bank cash account can be transferred to the investment account that you open and manage separately. Keep in mind that you must have at least $1,000 in your HSA at all times, even when investing any funds. 

How to Get Started

  • Visit HSA Bank’s webpage to find out more about the two self-directed investment options from Devenir or TD Ameritrade. 
  • Click on Learn More under each option to review the investment fund offerings and get information on how to open an investment account. You’ll be asked to log in to your HSA Bank account at and click on Manage Investments.

The Advantages of an HSA

Don’t forget the benefits of having an HSA account!

  • Tax-free contributions. You can make pretax contributions to your HSA up to the annual IRS maximums, plus additional contributions from Hitachi Vantara help your HSA balance grow faster.
  • Tax-free investment earnings. You don’t pay taxes on any earnings when you invest. (Some states, including California, tax HSA contributions and returns.)
  • Tax-free withdrawals. You pay no taxes on money you use to pay for qualified healthcare expenses.
  • Money that goes where you go. Even if you leave Hitachi Vantara or change health plans, you keep your HSA balance — all contributions and investment earnings. Funds left in your account continue to grow tax-free.
  • Convenient access to your money when you need it. Even if you’re investing it, all your money is always accessible to you. If you need your invested earnings to cover a health expense, no problem. Just log in to your investment account, and transfer funds back to your HSA cash account. 

Keep in mind that investing your HSA money is a lot like having a 401(k) — it involves risk and could result in a loss of funds. Before investing, you should consult with a financial advisor who can offer guidance on your investment options and retirement goals. It’s also a good idea to check your investments annually to make sure you’re on track and to make changes as needed.


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1 California and New Jersey treat HSA contributions as taxable income for state income purposes; in addition, New Hampshire and Tennessee tax HSA interest and investment earnings.

2 Betsy Jaffe, “Savings Needed for Medicare Beneficiaries’ Health Expenses Declines,” Employee Benefit Research Institute (EBRI), May 20, 2021.