HSA Savers Are Better 401(k) Savers

October 5, 2012 (PLANSPONSOR.com) – Participants who saved in both a 401(k) and health savings account (HSA) in 2011 had a higher 401(k) balance than those who only saved in a 401(k), a Fidelity Investments study found.

This result was unaffected by level of income. Additionally, nearly one-quarter of continuously contributing HSA account holders save most of their contributions, which will help pay for escalating costs of health care in retirement.  

On average, 401(k) participants who also contributed to an HSA in 2011 deferred 8.5% of their annual salary into their 401(k). Those who only saved in a 401(k) contributed an average of 8.1%

The average 401(k) balance for participants earning $40,000 to $60,000 a year and saving in both their workplace savings plan and an HSA was $63,000. Those in the same income bracket who saved only in a 401(k) had an average balance of $46,100, or 28% less. Likewise, those earning $100,000 to $150,000 a year and saving in both vehicles had an average 401(k) balance of $226,800, but those saving in just a 401(k) saw an average balance of $174,200 or 23% less.

“During benefit enrollment season, it’s encouraging to see that on average, saving in an HSA is not done at the expense of an employee’s crucial 401(k) retirement savings,” said William Applegate, vice president, Fidelity Investments.  “Employers and employees alike are increasingly recognizing the importance of planning for current and future health care costs and many are beginning to integrate this tax-advantaged product into their overall retirement strategy.” 

Fidelity found among its HSA account holders: 

  • Nearly one-quarter (23%) are savers, or those who spend only 10% or less of their annual contributions, electing to invest their remaining balances for health care costs in retirement; 
  • Thirty-three percent are spenders, meaning those who spend 90% or more on their annual contributions on qualified medical expenses; and 
  • Forty-four percent are hybrids, or those that spend their contributions buts also leave year-end remaining balances.


In 2011, the average HSA balance and contribution dropped from 2010, but for savers and hybrids, the average balances rose in 2011 over the previous two years.

Fidelity studied its HSA account holders who made continuous contributions to an HSA from 2009 to 2011 and uncovered an increased average balance across all categories of 50%, from $3,200 to $5,100. But savers saw a more than 100% increase in average balances from $5,900 to $12,100. For hybrids, average balances grew 79%, from $3,300 to $5,900.