Your Secret Retirement Account: A Minimalist's Guide to the HSA
- jennifercorkum
- Sep 18
- 4 min read
HSA as a Minimalist “Stealth IRA”
How to Turn Healthcare Savings Into Long-Term Wealth
When most people think of a Health Savings Account (HSA), they picture a way to cover medical costs. But for minimalists and intentional investors, an HSA is far more than that. Used wisely, it becomes a stealth IRA—a tax-advantaged investment account hiding in plain sight.
If you’ve been overwhelmed by the noise of “open enrollment” choices or skeptical of adding another account to your financial life, this post will show you why the HSA deserves a central role in your minimalist money system.
What Is an HSA, Really?
An HSA is a special type of savings account available only if you’re enrolled in a high-deductible health plan (HDHP). It’s designed to help you pay for qualified medical expenses.
But here’s the magic: unlike almost every other account in the financial system, the HSA has a triple tax advantage:
Contributions are pre-tax. Every dollar you put in lowers your taxable income.
Growth is tax-free. Dividends, interest, and capital gains aren’t taxed.
Withdrawals for medical expenses are tax-free.
No other account combines these three. Traditional IRAs give you a deduction, Roth IRAs give you tax-free withdrawals, but HSAs give you both—plus tax-free growth.
Why Minimalists Should Care
Minimalism is about cutting noise and focusing on what truly matters. When it comes to money, that means choosing systems that are:
Simple – one account doing the work of three.
Efficient – maximum return for minimum effort.
Flexible – able to serve you now and in the future.
The HSA is the rare financial tool that checks all three boxes.
The “Stealth IRA” Strategy
Most people treat HSAs like checking accounts: they contribute money, then immediately spend it on doctor visits or prescriptions. That’s fine, but it misses the bigger opportunity.
Here’s the stealth IRA approach:
Contribute the maximum every year.
For 2025, that’s $4,300 for individuals and $8,550 for families (+$1,000 if 55 or older).
Pay medical costs out of pocket instead of from your HSA.
Keep receipts, but don’t tap the account.
Invest the balance.
Choose low-cost index funds, just like you would in a 401(k) or IRA.
Let it grow for decades.
By retirement, you’ll have a huge pot of money compounding tax-free.
Withdraw strategically.
Reimburse yourself later for all those saved receipts (even years down the road).
Or, after age 65, use it like a traditional IRA for non-medical expenses (you’ll just pay regular income tax, no penalty).
The Numbers in Action
Let’s put this into perspective.
Say you max out a family HSA at $8,550 per year and invest it in a low-cost index fund returning 7% annually. After 20 years:
Contributions: ~$171,000
Growth: ~$196,000
Total: ~$367,000 tax-free
That’s not just a side account—it’s a retirement portfolio on its own. And unlike other accounts, you can tap it at any time for medical costs without penalty.
Minimalist Advantages of the HSA
One Account, Many Roles
Covers current healthcare costs if you need it.
Doubles as a retirement account if you don’t.
Acts as an emergency cushion in case of unexpected medical bills.
Simplifies Future Healthcare Spending
Healthcare is one of the biggest unknowns in retirement. An HSA directly solves this by giving you a dedicated, tax-free fund.
Portable and Flexible
HSAs are yours to keep—no matter where you work, no matter which insurance company you switch to.
Aligns With “Own Less” Philosophy
Instead of juggling multiple overlapping accounts, you can streamline. Think: one bank, one broker, one HSA.
Common Questions (and Minimalist Answers)
Q: What if I don’t have big medical expenses now?Perfect. That’s the stealth IRA sweet spot. Keep paying out-of-pocket, let your HSA compound, and reimburse yourself later.
Q: Isn’t the deductible scary with an HDHP?Yes, but that’s why an emergency fund is crucial. If you can handle the deductible, the long-term math favors the HDHP + HSA combo.
Q: What if I need the money before retirement?You can always use it tax-free for qualified medical expenses—no age restriction. It’s more flexible than most people realize.
Q: How is this different from an FSA?FSAs are “use it or lose it.” HSAs roll over forever. No comparison.
Pitfalls to Avoid
Not investing your HSA. Leaving it in cash defeats the purpose. Treat it like an IRA.
Losing track of receipts. If you plan to reimburse yourself years later, keep digital copies.
Choosing high-fee providers. Many HSAs charge for investing. Look for custodians with low-cost index fund access.
Confusing it with emergency savings. It’s tempting to dip in often, but the power comes from long-term compounding.
A Minimalist HSA Setup (Step-by-Step)
Pick an HDHP that fits your risk tolerance. Don’t choose just for the HSA—make sure you can handle the deductible.
Open an HSA with a low-fee provider. Fidelity, Vanguard, or Lively are popular minimalist-friendly options.
Automate contributions. Treat it like your 401(k)—money goes in before you see it.
Invest in broad index funds. Total stock market, total international, or a simple 2-fund portfolio.
Save receipts digitally. Store them in a cloud folder for future reimbursement.
Review annually. Adjust contributions and strategy as your health and finances change.
Closing Thoughts
Minimalism in finance isn’t about doing less—it’s about doing what matters most with less clutter. The HSA embodies this perfectly: one account, triple tax benefits, flexibility now and freedom later.
If you’re already contributing to a 401(k) or IRA, adding an HSA to your lineup might feel like “just another account.” But in reality, it’s one of the most efficient, minimalist tools available for both healthcare and retirement.
Think of it this way: you don’t need 20 accounts to build wealth. You need a few smart ones. And the HSA, when treated as a stealth IRA, might be the smartest of all.
Comments