Health savings account assets reached nearly $192 billion across 42.6 million accounts as of June 30, 2026, with more than half of those assets now invested rather than sitting in cash, according to the 2026 Midyear HSA Research Report from Devenir Group, released Oct. 13. The Minnesota-based HSA investment firm found that invested balances hit $100 billion, representing 52% of total HSA assets, up 37% from a year earlier when investments accounted for 46% of the market. This marks the first time investments have claimed the majority of HSA dollars.
Devenir's data shows that 4.7 million accounts, or 11% of all HSAs, held investments at midyear. Those accounts control 59% of all HSA assets when combining deposits and investments, with an average combined balance of $23,837—nearly nine times that of a funded deposit-only account. The firm attributes the jump to favorable market conditions, but also to a growing number of account holders using HSAs as long-term savings vehicles rather than merely for current medical expenses.
Account tenure and balance growth
The gap between investing and non-investing accounts is largely explained by tenure. Accounts opened in 2004 averaged $36,870 at midyear, while those opened in 2026 averaged just $1,963. The longer clients hold an HSA and keep investing, the larger the balance grows relative to accounts used as spending vehicles. HSAs holding at least $10,000 rose 29% year-over-year to 4.4 million, six times the roughly 707,000 that cleared that level a decade ago. Accounts with $25,000 or more grew nearly 50% to almost 1.9 million, about 14 times the 134,000 at midyear 2016.
Employer-affiliated accounts made up 61% of HSAs and 65% of assets. Only 12% of those were unfunded, compared with 33% of non-employer HSAs. The average funded account still holds only $5,642, up 14% from a year earlier, indicating that many account holders are still building balances.
Retirement health care costs loom
Fidelity Investments' 25th annual Retiree Health Care Cost Estimate puts lifetime health care costs for a 65-year-old retiree at $185,500, a 7.5% increase from last year's projection. That figure assumes Original Medicare plus Part D and excludes long-term care. Against that benchmark, the $23,837 average among investing accounts covers about 13% of the estimate, while the 2004 cohort's $36,870 covers about 20%.
Fidelity also found that 40% of Americans with HSAs have not invested their balances, and that 54% of pre-retirees wrongly assume Medicare covers all of their health expenses. Steve Betts, head of Fidelity Health, noted that Medicare “does not eliminate every health care expense.” Fidelity argues that starting health care planning earlier gives clients more room to build flexibility into a retirement income strategy. Health spending is already crowding out saving for some clients: a Nationwide Retirement Institute survey of GLP-1 users, released Oct. 7, 2026, found that 14% of current users have cut their retirement contributions to afford the medication. Long-term care sits outside Fidelity's estimate, and Edward Jones research on caregiver costs highlights the additional financial strain.
Contribution limits and eligibility changes
Under IRS Revenue Procedure 2025-19, the 2026 contribution limits are $4,400 for self-only high-deductible health plan (HDHP) coverage and $8,750 for family coverage. Account holders 55 and older can add a $1,000 catch-up contribution. Custodian choice matters more as balances grow, since investment menus differ on which funds they offer, whether they require a minimum cash balance before investing is allowed, and whether auto-investing is available.
Since Jan. 1, 2026, the One Big Beautiful Bill Act (Public Law 119-21) has treated bronze and catastrophic plans as HSA-compatible HDHPs. IRS Notice 2026-5, issued Dec. 9, 2025, clarified that the plans do not have to be bought through an Exchange to qualify. Clients on those plans who could not previously contribute may now open an HSA, provided they have no other disqualifying coverage. This expansion could broaden HSA adoption, especially among those with lower-premium plans. As HSAs become more investment-oriented, advisors may want to revisit how they position these accounts in retirement planning, particularly given the growing importance of health benefits in employee compensation.
