Bank of America found that women's HSA balances are 15% lower than men's

Saving for retirement is a life-long challenge, and one that seems to be harder for women. While they live on average five years longer than men, they're saving less.

Bank of America analyzed 565,000 health savings accounts (HSAs), looking at utilization trends across genders and generations. Women's HSA balances are 15% lower than men's, with women more likely to spend their HSA savings before retirement and contribute less to their accounts. Overall, men's average net HSA savings was $128 higher in 2022, and over the years that gap begins to add up. 

HSAs can serve as a vital retirement savings tool, because, unlike flexible savings accounts, the employee can set aside money on a pre-tax basis year after year, letting it grow and even investing it in mutual funds, stocks and other mediums. Contributions, account growth and withdrawals for medical expenses are tax-free, making it a highly sought-after savings vehicle despite being tied to high-deductible health plans. 

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For Lisa Margeson, managing director of retirement research and insights at Bank of America, HSAs are a tool for financial security that could especially benefit women in retirement. But she wasn't surprised to see women falling behind. 

"The gender pay gap still exists and that impacts contributions to both retirement plans and HSAs," says Margeson. "Add that to the fact that more women deal with career interruptions, like caregiving."

On average, women made 83 cents to every man's dollar in 2022, and still spend 40% more time caring for children than men, according to the National Bureau of Economic Research. It stands to reason that women struggle to save as much as men despite needing more money to keep them afloat in retirement. 

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Margeson points out that Bank of America saw a drop in the percentage of women contributing to their HSA between Gen Z and millennials — 83% versus 70% — presumably because millennials are at the age when they may be starting families. Notably, men saw a generational drop too, from 85% to 72%, but they still maintained their 2% lead. 

"When women move into middle-aged years, you tend to find them taking breaks from their careers to have children," says Margeson. "So they may either be reducing their contributions or pulling out some of their savings for immediate needs, as opposed to saving for future healthcare expenses." 

Margeson advises employers to at the very least educate their employees on the power of HSAs and how they can use them as retirement savings vehicles. Employer HSA contributions, caregiving benefits and flexibility will also help ensure women can maintain successful careers and save for their future. 

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As for women, Margeson encourages them to start their HSAs early, try to put at least a little aside each month and eventually invest that money according to their bank's capabilities. For those who are uncomfortable with a high-deductible health plan, Margeson points to emergency savings accounts or an interest-bearing savings account as a companion to their retirement plans. 

"The important thing is to save," she says. "Just start, even if it's a little bit, and try not to touch it. In the end, if you need it, it will be there for you."