Health savings accounts could help generate huge sums to offset health care costs in retirement, at least for some Americans, according to the Employee Benefits Research Institute.
Contributing the maximum amount to an HSA for 40 years, without withdrawing savings, would accumulate $360,000 at a rate of return of 2.5 percent, $600,000 at 5 percent, and almost $1.1 million at 7.5 percent, according to an EBRI analysis.
The potential savings HSAs could generate are assumed under best-case-scenario circumstances.
Of course, “many individuals may not have the means to both save in an HSA and pay their out-of-pocket health care expenses,” said Paul Fronstin, director of EBRI’s Health Research and Education Program and author of the report on HSAs.
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