As December kicks off, the consumer healthcare world is largely shifting its focus on the 12/31 flexible spending account (FSA) deadline, but it's hard to ignore the many headlines from the HSA industry that seems to be poised for a breakout in 2019.
In last week's column, we went over some helpful cheat sheets and terms that can help you better manage your HSA. This week we'll focus on the major developments in the industry that could transform the market going forward. Let's dive in!
Major 401(k) Player Enters HSA Space - John Sullivan, 401(k) Specialist
In a sign that HSAs are becoming a common topic in any retirement savings conversation, one of the nation's largest 401(k) providers, Vanguard, has partnered with the nation's largest HSA administrator, HealthEquity, to provide HealthEquity HSA products to their employees that feature Vanguard funds or the same investment options as their 401k plan lineup.
For those who are funding a Vanguard 401(k), they will now be able to enroll in HealthEquity products that feature Vanguard funds or the same funds that are available to them for long-term investment. Additionally, Vanguard has created a "Retirement Readiness Tool," which will provide a comprehensive view of both 401(k) and HSA growth to better learn how to use these retirement savings options in tandem. For those looking to connect their wealth and health, this is certainly big news to keep an eye on.
Individuals Not Realizing Help HSAs Can Offer for Retirement Health Expenses - Lee Barney, PlanSponsor
Stop us if you've heard this one before - but in yet another study of HSA users, a significant portion of the population are both under-utilizing their accounts for retirement savings, or underestimating how much they'll need for medical care in retirement. According to a new study conducted by HSA Bank of 1,200 HSA users, only 29% of users are using their HSA funds to save for retirement.
Worse, 67% of those surveyed believe that they will only need about $100,000 for retirement medical expenses. Here's how far off these people are: a 2018 Fidelity study estimated that the average couple retiring at age 65 will spend $280,000 on medical care in retirement. So, as far as HSAs have come in terms of enrollment over the past several years, HSA Bank's survey highlights the need for improved consumer education and retirement planning.
HSA Headlines is a weekly roundup of the latest, most relevant news and conversations about your health savings. It appears every Friday, exclusively on the HSA Learning Center. And for more about your physical and financial well-being, be sure to follow us on Facebook and Twitter.