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April 25, 2024 at 02:28 PM
The number of Americans who funded health savings accounts increased by 19% year over year to Jan. 31, Fidelity Investments reported this week. Fidelity HSA’s assets grew by 44% to a record $24 billion.
Young account holders are more likely than older ones to invest their HSA assets, Fidelity found.
“Americans and their employers increasingly recognize how important access to comprehensive benefits, including tax-advantaged savings vehicles, can be for managing the financial impact of their health care decisions,” Steve Betts, head of Fidelity Health, said in a statement.
It noted that since Fidelity’s HSA debuted in 2005, the cost of health care has more than doubled, according to a Centers for Medicare & Medicaid Services National Health Expenditure study covering the period from 2005 to 2022.
As Fidelity summarizes, HSAs have no taxes on contributions and none while money grows in the account, and any withdrawals for qualified medical expenses are tax-free.
Spending and Savings
As the number of HSA accounts continues to grow, Fidelity said investors may wonder whether there is a right way to maximize the benefits of their HSA. In fact, there is no one-size-fits-all approach, it said.
