One of the most famous retirement healthcare savings accounts is the HSA (Health Savings Account). This account aims to help the account holder in managing and reducing out-of-pocket spending for healthcare needs. However, it is very important to have an idea about the average HSA balance by age. It is because having a clear picture of the amount you must have at a certain age will help in making proactive decisions.
According to the latest studies, the HSA assets acquisition has reached $159 billion with over 40 million accounts in the year 2025. So, by evaluating the HSA balance age-wise, the retirement healthcare cost management won’t be a big deal. Many people think that only contributing to this account is sufficient. But with timely contributions, proper evaluation is also important.
Understand Why HSA Balances Vary with Age
The HSA, or the Health Savings Account, is an important part of retirement life. For managing the after-working-life medical expenses, having an HSA is crucial. It is because this account allows pre-tax income contributions, tax-free growth, and tax-free withdrawals for qualified medical problems.
One of the main concerns is why the HSA balance varies with age. However, it is very obvious because the HSA is a savings account, and with time, the saved amount increases with continuous contributions. The young individuals have low HSA balances because they are in the early stages of their careers, so the compounding growth is also less. However, people in their 40s or 50s have decent HSA savings. A consistent and increasing contribution plan will help in making a decent average HSA balance.
The difference in HSA balance age-wise is seen because the longer you contribute to an HSA, the higher the savings are. So, with time, the balance in this account increases, and a proper investment strategy will provide compounding growth. Also, with increasing inflation, it is necessary to increase the contributions accordingly to counter the rising medical and healthcare costs.
Average HSA Balance By Age
For people who ask, what is the average HSA balance by age that a person has? It is necessary to consider various points. First, the annual contribution limit of an HSA is $4,175 – $4,300 in 2025 for a self-account only. However, for a family HSA account, the limit is up to $8,550 annually. These contribution limits are managed and set by the Internal Revenue Service (IRS). Below is mentioned the age-wise distribution.
| Age Group | Average HSA Balance (Approx.) |
| 20–29 | $1,000 – $3,000 |
| 30–39 | $4,000 – $8,000 |
| 40–49 | $9,000 – $16,000 |
| 50–59 | $17,000 – $30,000 |
| 60+ | $30,000 – $45,000+ |
The above report is based on the Employee Benefit Research Institute report 2023. All the data is a median captured from various sources.
Average HSA Account Balance By Age
Below is the age-wise balance analysis in a descriptive manner.
Age 20-29:
- This age group is just an early start to a career. Young individuals tend to have low HSA balances because they have just started contributing.
- Also, the incomes at this age are mostly limited, which does not allow for a greater contribution to this account.
- People of this age also do not take the retirement healthcare savings seriously.
Age 30-39:
- People of this age have generally started their married life and are on a good track of annual income.
- Here, they have a decent income, so the HSA contributions are higher.
- People often make long-term investment strategies in this phase of life.
Age 40-49:
- People of this age group are at their peak years of earning, so the contribution can be maximum.
- Also, medical spending will tend to increase, which increases the expenses.
- People start to invest the HSA balance in mutual funds and ETFs.
Age 50-59:
- After this age, most people strongly dedicate their income to retirement funds, including the HSA.
- People of this age group also start making the extra catch-up contributions.
- The HSA balance at this age should be high to help in retirement.
Age 60+:
- At this age, the HSA balance is at its peak, which is all because of the years of consistency and investment planning.
- Also, from here, withdrawals from an HSA become very common and smooth.
- The tax-free withdrawals for medical expenses help prevent retirement savings from draining.
Factors Influencing HSA Balance
The median HSA balance by age highly depends on various factors. These factors affect the balance requirement and contributions to the HSA. Understanding these aspects will help in attaining a good HSA balance for retirement healthcare costs. Long-term retirement planning is necessary to manage all types of expenses, including medical expenses, effectively.
Major factors affect the HSA balance:
- Income Potential: It is very obvious that people with high earnings can contribute to an HSA up to the limit and in a consistent way. So, income is one of the major factors in the HSA balance.
- Investment Strategy: A decent investment strategy and long-term planning are necessary to get the best results while contributing to an HSA.
- Employers’ Contributions: Many times, the HSA provided by the employer comes with an extra feature. It is often seen that employers provide a monthly or timely contribution to the HSA of their employees. This will directly empower the retirement medical savings.
- Health and Medical Needs: People with chronic illnesses or long-term problems tend to withdraw more from the HSA, which reduces the savings for retirement.
- Spending Habits: If a person has frequent spending habits from the HSA, then this will reduce the overall retirement healthcare savings.
These factors are needed to determine how much I should contribute to my HSA. Knowing each and every factor can be very helpful while planning for retirement.
How Much You Should Have in Your HSA in Retirement?
This is a genuine question because it is very important to know how much you need to have in your HSA in retirement. However, this depends on various factors such as health history, family history, long-term care needs, etc. Financial advisors recommend having sufficient savings which are capable of covering both short-term emergencies and long-term healthcare costs. As the HSA comes with a triple tax advantage, making decent savings is possible.
Based on the recent studies, the ideal HSA balance is higher than what people are really saving. However, individuals need to contribute to the HSA so that the balance becomes sufficient to ensure that the retirement savings remain intact. For young people of the 20s or 30s, the ideal balance should be atleast $1,000 to $5,000. The number is given with the idea that from an early age, individuals start developing good saving habits for retirement.
If we move to a further age like 40s, then here the income is much higher, so contributing the complete HSA annual limit can be possible, and the individual tends to have atleast $10,000 to $20,000 in their account. In this age, the healthcare costs will increase due to disease development. It is very important to take advantage of catch-up contributions, which can be available in the 50s.
Also, for a couple having a family, HSA is a good decision because the contribution limits are higher, which is $8,550 in 2025. So, contributions to this account the maximum will definitely make the retirement healthcare expenses manageable. Always compare various situations and consider sudden emergencies that result in significant financial losses. People often ask, What is a good HSA balance for retirement healthcare costs.
Maximising Your HSA at Any Age
There are various ways to maximise the HSA balance at any age. Planning for retirement expenses is very important, especially for healthcare issues. If you have not focused on healthcare savings till now, then don’t worry. We will discuss some effective measures that can help increase retirement healthcare savings.
- Start Early: Ideally, it is necessary to start saving for future healthcare expenses from an early age in life. With this, individuals can attain the maximum saving potential, and the investment growth is also significant.
- Invest Strategically: One of the major aspects os an HSA account is that it provides investment options. So, making effective investment planning that will provide a good return after years is necessary to increase the overall HSA balance.
- No Unnecessary Spending: People spend some money from their HSA on general medical needs. However, avoiding these expenditures and expenses will empower the HSA balance.
- HSA Importance: Taking an HSA as a retirement savings vehicle will also help in contributions for the long term. This means consider the HSA savings as important as you take the retirement savings.
- Employer Match: If you have an employer associated with the HSA, then take full advantage of the employer’s match if available. This is because the extra contribution which the employer makes is an extra free saving.
Conclusion
The average HSA balance by age is very important to understand because a safe and peaceful retirement life highly depends on this factor. A good balance is one which can handle almost all the short-term and long-term medical issues that arise during retirement. This will help in preventing the retirement account from getting drained due to expensive medicare spending. The need for a dedicated healthcare account, like an HSA, is high because healthcare is one of the major expenses that people have after retirement.
So, always take proactive decisions for long-term retirement planning with a clear idea of how things work and an effective investment strategy.
Frequently Asked Questions
How much can a 55-year-old contribute to an HSA?
People aged 55 years need to contribute the maximum the HSA account allows. For an individual, the limit is $4,300, and for a family, it is $8,550 annually. Also, after this age, people are qualified to have catch-up contributions of $1,000 for extra savings increments. Also, this age is very near the retirement age, so making an effective savings plan becomes more important.
What is the age limit for HSA accounts?
There maximum age for making contributions into an HSA is 65 years. This is because the HDHP plan on which the HSA account will be opened expired just after you turned 65. So, without an HDHP having an HSA contribution is impossible. However, you can continue to use this account for medical and other purposes.
What is the average contribution to a healthcare HSA?
The average contribution a person can make in an HSA each year is $4,300 for an individual and $8,550 for a family HSA account. It is important to plan for an HSA contribution according to the annual income potential.
