The Investment Shift
The most significant trend in the HSA market has been the gradual shift from cash deposits to invested assets. In 2010, HSA investment assets were just $725 million, about 7% of total HSA holdings. By mid-2025, investment assets reached $72.9 billion, representing 46% of all HSA assets. This share has nearly doubled in just five years.
The disparity between investors and non-investors is striking. HSA holders who invest have an average combined balance (deposits plus investments) of $22,635, roughly nine times the $2,469 average for funded deposit-only accounts. About 4 million HSAs, or 10% of all accounts, now hold at least some invested assets, up 23% year-over-year at mid-2025.
For the wealth-building audience, this investment adoption curve is arguably the most important HSA metric. The accounts that generate meaningful long-term wealth are overwhelmingly the ones being invested, and the gap between invested and deposit-only accounts continues to widen.
The Triple Tax Advantage
HSAs are unique in offering a "triple tax advantage", contributions are tax-deductible (or pre-tax through payroll), growth is tax-free, and withdrawals for qualified medical expenses are tax-free. No other account type in the U.S. tax code offers all three. By comparison, 401(k) contributions are pre-tax but withdrawals are taxed; Roth IRAs are funded with after-tax dollars but grow and distribute tax-free.
This triple benefit has led financial planners to increasingly position HSAs as "stealth retirement accounts," particularly for higher-income households that can afford to pay current medical expenses out of pocket and let HSA balances compound. After age 65, HSA funds can be withdrawn for any purpose (taxed as ordinary income, similar to a traditional IRA), further blurring the line between health savings and retirement savings.
Contribution and Withdrawal Trends
Account holders contributed nearly $56 billion to HSAs in 2024, up 11% from the prior year. Withdrawals totaled $42 billion, up 10%. The net retained assets of roughly $14 billion, combined with investment gains, drove total assets from $123 billion to $147 billion during 2024 alone.
In the first half of 2025, contributions totaled over $33 billion while withdrawals reached $23 billion. Notably, withdrawals are growing slightly faster than contributions (11% vs. 6% year-over-year), a trend worth monitoring. As the HSA market matures and account holders age, the ratio of withdrawals to contributions will likely continue to shift.
Employer contributions remain a significant driver: 24% of all HSA contributions come from employers, averaging $927 per contributing employer. About 61% of all HSA accounts are employer-affiliated, and these accounts collectively hold 69% of total HSA assets.
The Account Age Effect
Devenir's data reveals a clear correlation between account age and balance size. Funded accounts opened in 2004 (the first year HSAs existed) carry the highest average balance at $33,010, while accounts opened in 2025 average just $1,723. This pattern holds consistently across every vintage year, demonstrating the powerful cumulative effect of long-term HSA ownership, the combination of sustained contributions and compounding investment returns.
This data point is particularly relevant for the wealth-building audience. An HSA opened early in one's career and consistently invested can grow into a substantial six-figure asset by retirement, especially given the triple tax advantage.
Average Balance: A Misleading Metric
The overall average HSA account balance (around $3,975 when dividing total assets by total accounts) understates the typical engaged account holder's position. About 21% of HSAs are unfunded (zero balance), which drags down the average. The PSCA's employer survey puts the average balance at $6,489 for 2024, but even this includes many accounts used primarily for current-year medical spending.
For investors specifically, the average combined balance is $22,635, six times the overall average. The distribution is highly skewed: a relatively small number of long-tenured, actively invested accounts hold a disproportionate share of total HSA wealth, while the majority of accounts function more like spending accounts than savings vehicles.
Looking Forward
Devenir projects the HSA market will surpass 47 million accounts and exceed $208 billion in total assets by the end of 2027. With the continued shift toward high-deductible health plans (which are required for HSA eligibility) and growing awareness of HSAs' investment potential, these projections appear conservative.
The key variable is investment adoption. If the share of accounts investing continues rising from 10% toward 15-20%, the gap between total asset growth and account growth will accelerate further, driven by market returns on a larger invested base. For households in the $500K+ net worth segment, HSAs represent one of the most tax-efficient vehicles available, a rare intersection of healthcare planning and wealth accumulation.
From $2.4 Billion to $159 Billion in 20 Years
Health Savings Accounts have been one of the fastest-growing asset classes in American household finance. When HSAs were created by the Medicare Modernization Act of 2003, the market barely existed. By the end of 2005, there was just $2.4 billion spread across roughly 1 million accounts. Twenty years later, HSA assets have surged to $159 billion across 40 million accounts, a compound annual growth rate of roughly 24% for assets and 20% for accounts.
That growth trajectory has been remarkably consistent. Even during the 2008 financial crisis and the 2022 bear market, HSA account totals never declined year-over-year. Asset growth dipped only modestly in 2022, when stocks posted their worst first half since 1970, before rebounding strongly in 2023 and 2024.