03/04/2026
One of the biggest blind spots I see in retirement planning isn’t market risk, it’s health care costs.
Most people understand that medical expenses will increase as they age. What they don’t fully grasp is how large and how concentrated those costs become later in retirement. For someone retiring at 65 today, it’s not uncommon to spend $165,000 or more on health care over retirement. For couples, that number can approach double — and those expenses often show up when flexibility matters most.
This is why I’ve become such a strong advocate for Health Savings Accounts when clients are eligible.
HSAs are unique. They’re the only account that offers tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses. But the real opportunity isn’t just the tax benefits — it’s how you use the account.
Instead of spending HSA dollars as they come in, many clients choose to pay current medical expenses from cash flow and allow the HSA to stay invested long term. Receipts can be saved and reimbursed years, even decades, later. There’s no expiration. No required minimum distributions. And after age 65, the account becomes even more flexible.
Used intentionally, an HSA can function as a dedicated retirement health care reserve, one that protects portfolio withdrawals, improves tax efficiency, and adds optionality when it’s needed most.
Rising medical costs aren’t a “future problem.” They’re a planning problem, and HSAs are one of the most effective tools we have to address it when they’re integrated thoughtfully into a broader financial plan.
If you’re unsure how an HSA fits into your overall retirement and tax strategy, let’s talk. Thoughtful planning today can make a meaningful difference later.
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