Your HSA Balance Is Lying to You
Open your HSA app right now. You see one number. That number is wrong.
Not wrong in a math sense. Wrong in a "this is not what your account is actually worth" sense. Your HSA has three numbers. Most people only ever see the first one.
The other two are where the real money lives.
All projections below assume 7% average annual returns (illustrative, not guaranteed) and the federal tax brackets noted. Actual outcomes vary by market performance, contribution timing, and personal tax situation.
Number 1: The Balance (The One Everyone Sees)
This is the dollar figure your HSA provider shows on the dashboard. Cash plus invested assets. Easy to find. Easy to track. Almost meaningless on its own.
Why? Because the balance does not tell you what is already yours, tax-free, today. It does not tell you what that money is worth in retirement. It just tells you what is sitting in the account right now.
A $50,000 HSA with $0 in receipts is a different account from a $50,000 HSA with $30,000 in receipts. Same number on the dashboard. Very different financial position.
Number 2: The Reimbursable Total (The One That Matters Most)
This is every qualified medical expense you have paid out of pocket since opening the HSA. Every doctor visit, prescription, dental cleaning, glasses prescription, copay. As long as you have a receipt and the expense happened after you opened the HSA, it counts.
The IRS has no time limit on HSA reimbursements. None. Pay a $400 dentist bill out of pocket today. Save the receipt. Reimburse yourself 25 years from now. The withdrawal is tax-free because it matches a qualified medical expense. This works under current IRS rules (Notice 2004-50). Tax law could change. If a future rule sets a deadline, anyone with stockpiled receipts would have to act under whatever transition rule the IRS provides.
Your reimbursable total is what you can withdraw tax-free at any time. For any reason. Without the IRS caring.
That is not "medical money." That is documented tax-free money waiting on you.
| Year | Annual Out-of-Pocket | Cumulative Reimbursable |
|---|---|---|
| Year 1 | $2,200 | $2,200 |
| Year 5 | $2,480 | $11,700 |
| Year 10 | $2,870 | $25,200 |
| Year 20 | $3,860 | $59,100 |
| Year 30 | $5,180 | $104,700 |
Assumes $2,200 in year-one out-of-pocket medical spend growing 3% a year for healthcare inflation. A family at this pace clears six figures in stockpiled receipts before retirement. That cumulative amount is withdrawable, tax-free, whenever they want.
This is the number that should be on your dashboard. Most HSA providers do not show it.
Number 3: The Tax-Adjusted Value (The One That Beats Every Other Account)
A dollar in your HSA is worth more than a dollar in your 401(k). This is not opinion. It is math.
The 401(k) charges you income tax on the way out. The HSA does not, as long as you have receipts. At a 22% federal bracket, every $1 in the HSA is worth $1.28 in 401(k) money for medical use. See HSA vs 401(k) vs Roth IRA for the full side-by-side.
Here is what that does to a six-figure balance.
| HSA Balance | 22% Bracket | 24% Bracket | 32% Bracket |
|---|---|---|---|
| $50,000 | $64,100 | $65,800 | $73,500 |
| $100,000 | $128,200 | $131,600 | $147,100 |
| $250,000 | $320,500 | $328,900 | $367,600 |
| $500,000 | $641,000 | $657,900 | $735,300 |
A $100,000 HSA at 22% has the same medical purchasing power as a $128,200 traditional 401(k). At a 32% bracket (high earners), that same $100,000 HSA is worth $147,100 in 401(k) terms.
State taxes make the gap wider. If you live in a state that taxes HSA contributions (California, New Jersey), the federal advantage still applies. See the California and New Jersey HSA state taxes guide for the details. If you live anywhere else, you also dodge state income tax on the way out. At a combined 28% federal plus state rate, $100,000 in the HSA equals roughly $139,000 in pre-tax 401(k) dollars.
Why Number 2 Beats Number 3
Number 3 (tax-adjusted value) makes the HSA look great on paper. Number 2 (reimbursable total) is what actually changes how you plan.
Here is why. The tax-adjusted value is hypothetical. It assumes you will eventually spend the money on something tax-advantaged. The reimbursable total is concrete. It is money you can withdraw tomorrow with zero tax consequences and zero questions asked.
Think about it like a personal credit line at zero interest. You have a balance. You have a tax-free withdrawal limit (your reimbursable total). As long as your withdrawals stay under that limit, the IRS does not care.
If you have $40,000 in reimbursable receipts sitting in a brokerage folder, you have $40,000 of tax-free liquidity. That is real. That is now. That is not "medical money." That is just money.
What This Looks Like in Practice
A 35-year-old maxes their HSA at $4,400 per year. They pay $2,500 per year in qualified medical expenses out of pocket. They invest the HSA aggressively.
At age 65 they have:
- ●HSA balance: $415,000 (roughly, at 7% annual returns, no spending from the HSA)
- ●Reimbursable total: $75,000 (30 years of $2,500 receipts)
- ●Tax-adjusted value at 22% bracket: $532,000
Three numbers. Three meanings.
The $415,000 is what the dashboard shows. The $75,000 is what they can pull out tax-free at any age, at any time, no questions asked. The $532,000 is what the entire account is worth compared to a 401(k) for medical use.
If they only ever look at the dashboard, they miss two-thirds of the picture. This is the same logic that makes the HSA double as a retirement account.
The 401(k) Comparison Most People Get Wrong
People say "the HSA is better than a 401(k) because it has triple tax advantage." That is true. But the framing misses the point.
The 401(k) wins on flexibility. You can use a 401(k) for anything in retirement. The HSA wins on tax efficiency for medical use, which is where a large share of retirement spending actually goes.
Fidelity's 2025 Retiree Health Care Cost Estimate puts a 65-year-old couple's lifetime retirement healthcare costs at roughly $345,000 (after-tax). That number does not include long-term care. Healthcare is one of the largest line items in retirement, sometimes rivaling housing.
$345,000 of qualified medical spending in retirement should come from the most tax-efficient bucket. That is the HSA. At a 22% bracket, paying that from your HSA instead of a 401(k) saves $75,900 in federal taxes alone.
The 401(k) is the better account for non-medical retirement spending. The HSA is the better account for medical retirement spending. Once you hit 65, the rules change in your favor (covered in Using Your HSA After 65). You should max both, not pick one.
The Reframe
Stop calling it a savings account. Stop calling it a medical account. Stop thinking of the balance as the value.
Your HSA is a tax-free liquidity machine. Every receipt is a deposit into a personal credit line. The IRS lets you draw on it whenever you want. Zero tax owed. The balance grows. The reimbursable total grows. The tax-adjusted value grows.
Three numbers. All three matter. The reimbursable total is the one that actually changes how you behave.
If you do not know your reimbursable total today, you do not know what your HSA is worth.
How Tripl Surfaces All Three Numbers
This is the gap I built Tripl to fix. HSA providers show you the balance. They do not show you what you can withdraw tax-free right now. They do not show you what your account is worth in 401(k) equivalent dollars.
Tripl runs the math automatically. Upload a receipt and we add it to your reimbursable total. Watch a per-expense growth projection in the drawer for any unreimbursed expense. See your tax-free withdrawable balance update on the dashboard.
The point is not to add another app. The point is to make the two hidden numbers visible so you can plan around them.
Frequently Asked Questions
What counts toward the reimbursable total?
Any qualified medical expense paid out of pocket after you opened your HSA. Two conditions: you have a receipt, and you have not already reimbursed yourself for it. Doctor visits, prescriptions, dental, vision, mental health, qualified medical equipment, and more. See our full list of HSA-eligible expenses.
Does the IRS really have no deadline on reimbursements?
Correct. IRS Notice 2004-50 confirms there is no time limit. Two conditions apply. The expense must be incurred after the HSA was established. And you cannot have already taken a tax-free reimbursement for it. Save the receipts.
What if I lose a receipt?
The IRS expects you to keep documentation. Bank statements alone are usually not enough. Use your insurance EOB plus the provider statement, or use an app that stores receipt images. No receipt, no tax-free reimbursement.
Is the tax-adjusted value real or hypothetical?
Both. It is real in the sense that the tax savings are guaranteed by current law for medical withdrawals. It is hypothetical in that future tax rates and personal brackets are unknown. Use it as a comparison tool, not a planning number.
Should I reimburse myself now or let receipts stack?
That depends on your goals. Stacking receipts builds tax-free liquidity in the future. Reimbursing now frees up cash today. See our delayed reimbursement breakdown for the full math.
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*Brandon Nied is the founder of Tripl. He is not a CPA, CFP, or licensed financial advisor. This post reflects research and personal experience tracking HSA expenses for a family of five. Always confirm tax positions with a qualified professional.*
*This is educational content, not financial or tax advice. Consult a qualified professional before making decisions about your HSA.*