Health savings account (HSA) assets reached nearly $192 billion across 42.6 million accounts as of June 30, 2026, and more than half of that money is now invested rather than held in cash, according to the 2026 Midyear HSA Research Report from Devenir Group, a Minnesota-based HSA investment solutions firm. Devenir released the report on Oct. 13, 2026.
Invested balances reached $100 billion, or 52% of total assets, up 37% from a year earlier, when investments made up 46% of the market. It is the first time investments have accounted for the majority of HSA dollars.
About 4.7 million accounts, or 11% of all HSAs, held investments at midyear. Those accounts hold 59% of all HSA assets once their deposits and investments are combined, and their average combined balance of $23,837 is nearly nine times that of a funded deposit-only account, Devenir said. The firm said favorable markets helped drive the jump, but the shift also reflects more account holders using the HSA as a long-term savings vehicle alongside paying current medical bills.
Tenure explains much of the gap. According to Devenir, accounts opened in 2004 averaged $36,870 at midyear, while those opened in 2026 averaged $1,963. The longer clients hold an HSA and keep investing, the larger the balance grows relative to accounts used as spending vehicles.
HSAs holding at least $10,000 rose 29% from a year earlier to 4.4 million, six times the roughly 707,000 that cleared that level a decade ago. Accounts with $25,000 or more grew nearly 50% to almost 1.9 million, about 14 times the 134,000 at midyear 2016.
Employer-affiliated accounts made up 61% of HSAs and 65% of assets. Only 12% of them were unfunded, against 33% of non-employer HSAs. The average funded account still holds only $5,642, up 14% from a year earlier.
Fidelity Investments’ 25th annual Retiree Health Care Cost Estimate puts lifetime health care costs for a 65-year-old retiree at $185,500, a 7.5% increase from last year’s projection. The figure assumes Original Medicare plus Part D and excludes long-term care.
Against that benchmark, the $23,837 average among investing accounts covers about 13% of the estimate. The 2004 cohort’s $36,870 covers about 20%.
Fidelity also found that 40% of Americans with HSAs have not invested their balances, and that 54% of pre-retirees wrongly assume Medicare covers all of their health expenses. Steve Betts, head of Fidelity Health, said Medicare “does not eliminate every health care expense.” Fidelity argues that starting health care planning earlier gives clients more room to build flexibility into a retirement income strategy.
Health spending is already crowding out saving for some clients. A Nationwide Retirement Institute survey of GLP-1 users, released Oct. 7, 2026, found 14% of current users have cut their retirement contributions to afford the medication. Long-term care sits outside Fidelity’s estimate, and Northwestern Mutual research has found that Americans who work with an advisor are far more likely to have a long-term care plan than those who do not.
Under IRS Revenue Procedure 2025-19, the 2026 contribution limits are $4,400 for self-only high-deductible health plan (HDHP) coverage and $8,750 for family coverage. Account holders 55 and older can add a $1,000 catch-up contribution.
Custodian choice matters more as balances grow. Investment menus differ on which funds they offer, whether they require a minimum cash balance before investing is allowed, and whether auto-investing is available.
Since Jan. 1, 2026, the One Big Beautiful Bill Act (Public Law 119-21) has treated bronze and catastrophic plans as HSA-compatible HDHPs. IRS Notice 2026-5, issued Dec. 9, 2025, clarified that the plans do not have to be bought through an Exchange to qualify. Clients on those plans who could not previously contribute may now open an HSA, provided they have no other disqualifying coverage.
Devenir expects the change to show up in account growth and contributions before it shows up in total assets. The firm projects the HSA market will exceed 49 million accounts and $246 billion in assets by the end of 2028.
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