Why Millennials (or anyone) Can’t Afford to Miss out on HSAs

The worst thing you can do when saving for the future is to wait for tomorrow. Too often, the complexities that come with navigating the retirement planning landscape turn people away from savings accounts that could ease their burden in the long run. This trend has been especially true with the millennial generation, those born between 1980 and 2000. Luckily, they still have decades in which to save and plan for a smooth and comfortable retirement.

One of the most important, but often overlooked, elements of saving for retirement is factoring in medical costs. It is estimated that couples who are currently around the age of 45 can expect to pay $592,000 in medical costs during retirement. That’s an incredible burden to account for, and one that can leave many retirees feeling blindsided if the proper steps haven’t been taken in advance. While many may be looking to see a change with the ACA or with the new administration, what people must understand is that increased personal responsibility for healthcare costs is the new norm in America. The “patient as the payer” is how the system will support the rise in population and chronic conditions. The system of employer-supplied healthcare benefits was originally designed for acute care, but that has changed.

These kinds of financial pressures are on younger workers’ minds. According to the Willis Towers Watson Global Benefit 2015-16 Attitudes Survey, 53% of millennials are concerned about their personal financial situation. Furthermore, millennials are interested in saving for retirement, yet feel a lot of stress about it because they may simply may not have the means to invest in it on top of all the near-term debt. Perhaps that is why 48% are interested in having their employer play a more active role in helping them to manage their finances. Despite this compelling data, many organizations overlook benefits in favor of flashy perks.

Tools and resources that can help the growing millennial workforce achieve financial stability should be a key element in any benefits package. Employers need to do more to educate millennials on all the resources available, such as health savings accounts, and the specific value they bring to a millennial’s unique financial situation. Younger employees may be aware they can take advantage of HSA benefits, but that’s not enough. How many understand these accounts can do more than absorb shocks associated with unexpected healthcare expenses? Employees need to be educated on how HSAs serve as an investment vehicle to accumulate retirement savings.

Transparency, facilitation and access to good information is powerful.

With plenty of time still ahead to save, millennials are in the best position to take advantage of investing in a health savings account (HSA). These savings accounts are known to be amongst the most underutilized tools in the industry, despite all the benefits they offer. In fact, many experts claim they are better than a 401K. Not only is the interest you earn not taxed when it used for qualified medical expenses, but the mandatory contribution limits are low and there’s no “use it or lose it” clause like those found in other health savings options (i.e. FSAs). In the past, HSAs have been presented alongside health insurance options, giving consumers the perception that an HSA is just another short-term healthcare spending option, rather than a long-term healthcare saving one. While HSA funds can be used for short-term expenses, the true benefits come from long-term planning to take advantage of the investment potential offered by the account.

For the millennial generation, HSAs represent an opportunity to relieve some financial stress. Through maximizing your HSA contributions for long term savings and benefit growth, you are also minimizing your tax bracket for short term benefit.

Between a high generational unemployment rate, student loans and increasing credit card debt, financial planning and the ability to save can seem a bit out of reach for millennials. HealthExpense can change that. With a simple, personalized experience seamlessly integrated across multiple platforms, HealthExpense helps to make managing your healthcare and saving for the future a painless part of retirement planning. Payments can be made with just one click, and every bill, claim and reimbursement is stored in the same place. For a generation used to figuring things out on their own and using intuitive online resources to navigate otherwise complex situations, HealthExpense can make reaching retirement – with all your healthcare needs covered – easy.

HSAs are the healthcare industry’s little-known secret. By unlocking their potential and taking advantage of the tax-deferred investment options, your savings can yield huge returns in the long run. To find out more about health savings accounts, or to ask one of our HealthExpense experts how we can best help you manage your healthcare, visit us today at!

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