Recent research highlights a potential retirement planning opportunity: only 22% of HSA participants invest their HSA assets, according to the 2026 HSA Survey from the Plan Sponsor Council of America. For clients who can cover current qualified medical costs from other resources, preserving and investing HSA assets may create a tax-advantaged source of funds for healthcare expenses later in retirement.

HSA contributions may receive favorable tax treatment, earnings can grow tax-free, and funds used for qualified medical expenses can generally be withdrawn without federal income tax. Allowing those assets to remain invested can potentially create a dedicated source of future healthcare funding without requiring qualified expenses to be paid from taxable accounts or other retirement assets.

Advisors can incorporate the HSA into withdrawal and income projections rather than treating it as a separate employee benefit. Consider modeling which assets could fund different categories of retirement spending and how that allocation may change over time. Preserving HSA assets for qualified healthcare expenses later in retirement could influence which accounts are tapped first, the amount of taxable income generated by withdrawals, and how much of the client's other retirement resources remain available for ongoing income needs. For some clients, deciding when to use the HSA may be just as important as deciding how much to contribute.