Fidelity Study: HSAs on the Rise, But Many Aren't Maximizing Benefits
The number of workers who have health savings accounts is on the rise, but many employees are not maximizing the benefits of HSAs, finds a new Fidelity Investments study.
According to Fidelity’s research, 25 percent of employees that have access to an HSA are now using triple tax-advantaged savings accounts. The report also found when employers only offer an HSA-eligible health plan, 46 percent of employees are adding it. But, employees are not making the most of the benefits the accounts can offer.
Fidelity offers some tips on how to maximize your HSA:
1) Increase contributions.
2) Use your account now and later. Keep in mind, if you don’t spend what you contribute to an HSA, you won’t lose the money at the end of the year, which is a popular misconception.
3) Invest for growth. Fidelity found 46 percent of HSA account owners don’t realize they can invest contributions in mutual funds or other investment products.
4) Use savings as needed when you turn 65. 53 percent of HSA owners don’t realize HSA balances can be used for other retirement expenses.
5) Good saving habits can lead to more good moves. Fidelity found those who save in both an HSA and a defined contribution account tend to save a higher percentage of their paychecks.