HSA balances hit record high, but are clients using them wrong?

Health savings account balances reached an all-time high in 2024, according to new research.

But the Employee Benefit Research Institute data also reveals a stubborn gap between what Americans are saving and what they are likely to need.

The average HSA balance climbed to $5,532 in 2024, up from $4,747 the year prior, according to EBRI's August 2026 analysis of HSA account data. The figure represents notable year-over-year progress, but it covers only about two-thirds of the individual out-of-pocket maximum under a high-deductible health plan, which stood at $8,050 in 2024.

For families, the shortfall is even more pronounced: the family out-of-pocket cap reached $16,100 last year, more than triple the average account balance.

The numbers pose the question of whether clients are actually using HSAs as the long-term wealth-building vehicles they can be, or are they treating them as just another spending account?

Contributions remain modest

On the contribution side, the average account holder put in $2,308 in 2024, while employers chipped in an average of $727, a combined $3,035 that falls well short of the IRS contribution limits.

For context, the 2024 HSA contribution limit was $4,150 for individuals and $8,300 for families covered under a family high-deductible health plan.

More than half of account holders made a withdrawal in 2024, pulling out an average of $1,870. That pattern suggests a significant portion of HSA users are spending down their balances rather than allowing funds to accumulate and compound tax-free over time.

EBRI also noted that contributions and distributions, when adjusted for inflation, were meaningfully higher during the 2010s than in 2024. It’s a trend that may reflect broader affordability pressures squeezing household budgets.

The investing gap

The research discovered that just 18% of accountholders had invested any portion of their balance in equities, funds, or other non-cash assets in 2024, according to EBRI.

The remaining 82% were holding their balances in cash, forgoing the long-term compounding potential that makes the HSA one of the most tax-efficient savings vehicles available under current US law.

The share of investors has grown for eight consecutive years, EBRI found, but the overall adoption rate remains low; a persistent advice gap that advisors are increasingly looking to close.

A younger account base

The composition of HSA holders is also shifting. More than 40% of all HSA accounts were opened since 2022, according to EBRI, suggesting that a large portion of the account base is relatively new and may not yet have accumulated significant balances.

That demographic reality could explain some of the low average balance figures as newer accounts simply have had less time to grow.

But a client who maximizes contributions starting in their 30s and invests those funds in a diversified portfolio could accumulate a substantial balance by retirement age that can be used tax-free for medical expenses or, after age 65, for any purpose (subject to ordinary income tax, similar to a traditional IRA).

What advisors should be asking

The EBRI findings add empirical weight to what many advisors already observe anecdotally: most clients are underusing HSAs as a retirement savings tool. The average balance of $5,532 looks less impressive when measured against either current-year out-of-pocket maximums or the six-figure medical costs many Americans will face in retirement.

According to separate EBRI projections, detailed in the institute's ongoing retirement security research,  a 65-year-old man today may need $184,000 in savings to cover medical expenses in retirement with a 90% probability of success; for a woman, that figure rises to $217,000.

Bridging that gap will require clients to do more than simply open an HSA. It will require consistent contributions, a willingness to invest beyond cash, and a long-term mindset that treats the account as a complement to their 401(k) and IRA strategy rather than a short-term medical slush fund.