HSA Coach’s Newest Retirement Calculator

Check out the new “Retirement Calculator” meant to help you calculate all of your needed savings for retirement by combining your HSA savings with your 401(k), IRA, etc.

Open your HSA Coach app →go to “Calculator” → go to “Retirement — Account Growth”

For those of you who joined us early on you have watched HSA Coach grow and evolve. Our early aspirations included Health Savings Account maintenance and best-in-class education and saver recommendations. With the release of the latest in-app calculator — a general-purpose retirement savings calculator combining your HSA and other long-term savings accounts– we aim to highlight the growing importance of the investment portion of your Health Savings Account. Coincidentally, we recently presented these topics during a CE-credited webinar for financial advisors, and will continue our mission of educating and improved planning.

The Newest Calculator — HSA’s, 401(k)s, IRAs…Oh My!

As we have written here previously and underscore in many sections within the HSA Coach app, HSA Playbook, and website, your Health Savings Account is one of the most tax-friendly savings accounts available. Contributions are pre-tax, savings grow tax deferred and withdrawals for medical expenses are tax-free (known as “triple tax” savings in the industry).

However, these savings are not only applied to your HSA checking account, but also your HSA investments, meaning the tax code treats your HSA much the same way it does your 401(k) and IRA (and better). And because the tax code can sometimes conjure up unpleasant April 15th memories, we understand the importance of making information consumable and actionable, hence our latest calculator. We want you to see your account balances in one user-friendly location, as well as highlight the importance of compound interest and tax-free withdrawals (which Einstein referred to as “the eighth wonder of the world”).

As background, recall out of pocket health care costs in retirement are projected to be nearly a quarter million dollars for a couple retiring today. For those of us with retirement in the distant future this number is expected to be much higher. However, as part of a regular contribution program and investment time horizon, even these sizable balances are not unattainable, as the app calculator illustrates.

Furthermore, as you near retirement you are likely to begin focusing on how much of your savings you get to actually spend, namely your after tax distributions. Remember, all the pre-tax and tax deferred growth in your traditional 401(k) and IRA will finally be assessed by the taxman.

Below is a table we’ve created to illustrate the tax impact on popular retirement savings programs.

An HSA could be the most tax-friendly account in your retirement portfolio

While our new retirement planning calculator is meant to underscore the power of compound interest and what all of your accounts are capable of both pre and post tax - including your HSA — you should always consult with a qualified financial planner and/or tax advisor to assess your specific situation.

About HSA Coach. After Morningstar purchased our last startup we built a digital platform, HSA Coach, starting with the goal of educating users on Health Savings Accounts, as well as helping them incorporate HSA’s into their broader investment portfolio. We have since added personalized calculators to make contribution estimates, explain the tax benefits and allow users to allocate between their HSA and employer sponsored retirement plan, like a 401(k). More coming. Available for free in the App Store and Google Play.