Kathleen Elkins

Thu, Jun 5, 2025, 10:30 AM7 min read

• Initiating an HSA transfer prompted me to look into the fees associated with the accounts.

• Next, I calculated how much I could owe in fees by the time I retire.

• I didn't make any changes, but it's helpful to understand exactly how fees can impact net worth.

When I initiated an HSA transfer earlier this year, it forced me to get intimate with my accounts and understand details such as fees that I'd previously brushed aside.

HSA stands for Health Savings Account, and its primary function is to save for healthcare-related expenses. However, it can also be used as an investment tool — similar to an IRA, you can invest your HSA balance in mutual funds, stocks, or ETFs, depending on what the plan offers — and supplement your retirement savings.

This is exactly what a handful of millennial millionaires I've spoken to are doing: Maxing out the account (in 2025, individuals can contribute $4,300 to an HSA), not touching the money, and letting it grow tax-free.

A major perk of the account is its three-pronged tax benefit: You can contribute pretax dollars (reducing your taxable income), your contributions and earnings grow tax-free over time, and you can withdraw your money tax-free to cover qualified medical expenses.

One self-made millionaire I spoke to, who has his investments spread across seven types of accounts, told me that his HSA is his "favorite by far."

It's a great account, and one that I have access to since I'm enrolled in a high-deductible health plan (HDHP). Note that an HDHP, which offers a lower premium but comes with a higher deductible, is not the best choice for everyone. It's typically well suited for people who are very healthy, don't plan on seeking medical care frequently, and can afford to pay the deductible upfront in the event of a medical event.

After two years of simply saving in an HSA while writing about millionaires who are putting that money to work, I decided to do the same and invested about $4,400 worth of my HSA dollars into a target date fund in early 2024. I calculated that if I continued to max out my account and invest my HSA dollars for the next 30 years, it could mean about a $200,000 difference in net worth.

If used strategically, an HSA can be a powerful tool. However, like many financial products and services, there's fine print that's important to be aware of and easy to overlook, especially when you're thinking about the six-figure dollar amount you just tacked onto your nest egg.

Prior to the HSA transfer, which I initiated to consolidate two different accounts, I hadn't bothered looking under the hood of either account. However, before transferring one to the next, certified financial planner Brent Weiss recommended I compare the two.