The Late Starter · September 2, 2026
A Chapter in My Late Start Retirement Journey
I was financially illiterate. Because of that, I only came to understand the importance of my 401(k) and Roth IRA much later than I should have. But of everything, the account I learned about last — and latest — was the HSA (Health Savings Account).
A Triple Tax Advantage
The HSA is one of the most powerful tax-advantaged tools available for healthcare costs in America. Its core benefit is often called the “Triple Tax Advantage”:
- Contributions are tax-deductible
- Investment growth is tax-free
- Withdrawals for qualified medical expenses are tax-free
Having all three of these apply within a single account is unusual. Both the 401(k) and Roth IRA offer tax benefits of their own, but an account that avoids taxation at every stage — contribution, growth, and withdrawal — is rare.
For a long time, I didn’t fully understand this. And that ignorance cost me in three specific ways.
Three Mistakes I Made
First, I thought of the HSA as nothing more than a savings account for medical expenses. I didn’t realize it could actually be invested, the way a 401(k) or Roth IRA could. It wasn’t until I started seriously thinking about retirement that I discovered the real power of this account — and only then did I belatedly begin building an investment portfolio within it.
Second, I treated the money sitting in my HSA as funds meant to be spent immediately on medical costs. Had I invested that money instead, it could have grown tax-free on top of everything else. One day, a coworker mentioned that he never touches his HSA for medical expenses at all. Something dormant in me seemed to wake up in that moment. I had started investing by then, but because I kept using the account for medical spending anyway, the growth remained minimal.
Third, I contributed far less than the annual maximum allowed. Because I based my contributions on the medical expenses I expected that year, the balance rarely grew.
What I Need to Do Now
Even at this late stage, I needed to draw a clear line between what to do and what not to do.
Max out the contribution limit, and invest that money.
And cover medical expenses out-of-pocket whenever possible, leaving the HSA balance untouched.
Like the 401(k) and Roth IRA, the HSA is ultimately a game of time and compounding more than contribution size. The earlier you start, the better. My late start with retirement planning means I have to pay a larger price for the years I lost.
A Small Comfort, and the Time That Remains
There’s a small comfort in knowing that only about 11% of Americans hold an HSA account. It tells me that missing the full potential of this account wasn’t a mistake I made alone. That, at least, keeps it from feeling entirely hopeless.
What remains is roughly seven years. Short, in one sense. Long, in another.
A few years ago, when my company was acquired by a larger one, I also began receiving a modest employer contribution to my HSA. My goal is to reach $100,000 in this account by the time I retire.
As it always is for someone starting late, what matters most now is how I use the time I have left.