HSA balances hit a record; most owners still don't invest

The average health savings account balance hit a record $5,532 in 2024, according to EBRI. Only 18% of account holders had anything beyond cash invested. The institute's 13 years of HSA data show that 56% of holders made withdrawals — a sign that for many households, the tax-advantaged account still covers current medical costs rather than building long-term savings.

Contributions trail the legal limits. Employees put an average of $2,308 into HSAs in 2024; employers added $727. The individual cap was $4,150; the family cap, $8,300. EBRI notes that after inflation, contributions have slipped since the 2010s even as balances grow. The typical balance is well below average out-of-pocket maximums. For single coverage, the average maximum is $8,050. For family coverage, it is $16,100. The cash cushion serves a real purpose.

Tenure changes the investing picture. HSAs opened between 2020 and 2024 have 57% to 65% of their assets invested. Accounts opened in 2016 or earlier have 78% to 92% of their assets invested. The share of holders who invest has risen for eight consecutive years. In 2017, it was 5%. By 2024, it reached 18%. Slow, but steady.

The pattern is familiar: people build a cash buffer first and only slowly trust the account with long-term money. That creates a concrete asset-location conversation for advisors. A client with a healthy emergency fund and years of HSA cash sitting idle may be giving up tax-free growth, especially when the alternative is a taxable account. The 18% figure gives advisors a reference point, and the behavior of long-tenured holders shows the path works.

EBRI's report is descriptive, not prescriptive; it does not model an optimal HSA strategy. Yet the persistence of cash-heavy accounts, even at record balances, points to habit as much as health costs. Advisors who move clients from HSA cash into investments are doing more than reallocating. They are making the account do the work its tax advantages were designed to encourage.