As for a Health Savings Account (HSA), the report noted that both younger and older adults lack understanding of its advantages from a tax perspective and as a retirement savings tool. In fact, only 17% of younger adults use an HSA and of those who have one, 25% use it to pay only for today's health care expenses (rather than saving those funds as a tax-free way to cover health care costs in retirement).
Similarly, 43% of older adults do not know the advantages of an HSA. Only two in five (42%) know that HSA contributions or funds drawn to pay for qualified expenses are not taxed and of older employed adults who contribute to their HSA offered by their employer, more than half (52%) use it to pay for today's health care expenses only, the report noted.
And while younger adults indicated that they do not have the money to cover unplanned medical expenses, fewer than half have started saving through a 401(k) or IRA (44%), and 57% of those saving for retirement contribute 10% or less.
Also, younger adults are not taking advantage of wellness programs offered through their employers. Of the 29% who said they have access to wellness programs from their employer, only 17% of those participate in those programs.
Additionally, the report noted that while many older adults are concerned and stressed about health care costs, many are not having informed discussions with professionals on how to prepare. Only 33% plan on discussing health care costs and 32% long-term care costs during retirement with a financial advisor or consultant.