The goal of amassing $1 million in a health savings account by retirement will elude the vast majority of clients, but advisers could still put these optimistic projections to good use.
HSA holders would need to contribute the maximum legal amount each year, including catch-ups, for four decades, avoid any distributions until they’re 65 years old and net a healthy rate of return of 7.5%, according to a study released last month by the Employee Benefit Research Institute, an industry research organization. Those rosy assumptions won’t reflect the reality for most HSA savers. However, advisers can nevertheless nudge clients toward saving in their HSA with a wealth of statistical estimates showing their massive health care needs in retirement and the corresponding potential of the accounts as a savings vehicle, experts said.
