Nationwide announced its plans to make health savings accounts available in response to the perfect storm brewing for America’s future retirees.
With health care costs continuing to rise, less certainty that Social Security income will remain at current levels and Americans living longer, future retirees need additional savings vehicles to cover out-of-pocket health expenses in retirement.
The Nationwide HSA will be administered by HealthEquity, Inc.
HSAs allow for pre-tax contributions to pay for qualified health care expenses that insurance doesn’t cover now or in the future. HSAs are an attractive savings vehicle because of a triple-tax advantage: tax-free employee contributions, tax-free investment growth and tax-free withdrawals for qualified medical expenses.
“We are committed to bringing America’s workers solutions designed to help them gain confidence and take action to efficiently prepare for health care expenses in retirement,” said John Carter, president of Nationwide’s retirement plan business. “HSAs supplement workplace savings plans, while offering special tax treatment not found in other retirement accounts.”
HSAs Boost Total Savings For Retirement
A 2018 Alight study demonstrated that when workers are eligible to contribute to HSAs and 401(k)s, those who use both save more than people who use just one. The Nationwide HSA will allow participants to more efficiently track their 401(k), 457 and 403(b) plans along with their HSA, while offering access to education and investment selection.
“The Nationwide Retirement Institute has been educating consumers on managing health care costs in retirement for six years, and our research shows that more than 73 percent of future retirees say that one of their top retirement fears is health care costs going out of control,” said Kristi Rodriguez, leader of the Nationwide Retirement Institute. “We believe saving for health care expenses down the road is a critical component of a successful retirement plan.”