According to an estimate by Kaiser Health News, a couple retiring in 2012 will spend $240,000 on health care expenses. Statistics also indicate that a majority of employees (consumers) save virtually nothing on their own for retirement, other than through employer-sponsored plans (i.e., 401(k) plans).

There is an elephant in the room and people are starting to take notice. Flexible Benefit Service LLC (Flex), in a nod towards National Save for Retirement Week (a congressionally endorsed, national event that takes place from October 21 – 27, 2012) is featuring the capabilities of a health savings account (HSA) repurposed as a smart way to begin to save for retirement.

America’s Health Insurance Plans (AHIP) had reported earlier this year that more than 13.5 million Americans are covered by HSA-eligible high deductible health plans (HDHPs). This represents an 18+% increase since last year.

Why are they so popular?

HSA participants receive a three-pronged tax savings benefit!

This means HSA participants get rewarded three times when properly managing their HSA funds, as follows:

• Contributions to the HSA are tax-free
• Earnings on assets (interest and investments) in the HSA are tax-free
• Withdrawals from the HSA for qualified health care expenses are tax-free

Because of these simple tax-advantages, employees (who are able), might want to think about repurposing their HSA as a reserve for retirement. By paying current health care costs with after-tax dollars and continuing to contribute to an HSA, the money in the HSA grows tax-free. Also, employees should make sure their HSA investments correspond with the repurposed HSA, including longer term assets like stocks and bonds, which can be invested in for maximum long-term savings.

So, what are you waiting for? If you have an eligible HDHP, get started here.