After reading last week’s Tip (HERE), one ‘subscriber’ commented the average Health Savings Account balance (~$2,700) seemed low. 

I agree, (Doubting) ‘Thomas' and thanks for so carefully reading my Tips. (But, get a life!)

Factors in play here:

• It’s been widely reported 40-57% of Americans have less than $1,000 of savings, so unless the employer contributes to the HSA, uptake is limited. (More on that next week.)
• For people living paycheck to paycheck, first dollar coverage (e.g., Co-Pays) is more popular than the “qualified” high-deductible health plan required for an HSA. 
• HSAs offer tax advantages and the potential to enhance retirement savings; benefits poorly communicated to employees. (That’s on Brokers and HR. We can do better.)

Here’s a little-known fact about HSAs.

There is no time limit on reimbursing yourself for medical expenses. Save all your receipts but pay out of pocket today, while you supercharge your HSA’s growth through investment in stocks or mutual funds. (Note the HSA must have been established before those expenses.)

Bonus fact. 

Beginning at age 65, the 20% penalty on non-medical withdrawals ends, so your HSA basically becomes an IRA.

Confirmed by a CPA (aka ‘Thomas’).