Fidelity® 401(K) Participants with Health Savings Accounts Continue to Outpace Average 401(K) Savings Levels

3-Year Analysis Shows HSA Balances on the Rise; Nearly One Quarter of HSA Account Holders Setting Aside Contributions for Health Care Costs in Retirement

BOSTON – Fidelity Investments® today released its annual analysis on the saving habits of 401(k) participants and health savings account (HSA) owners revealing that – regardless of income – those who saved in both vehicles in 2011 had a higher 401(k) balance than those who saved only in a 401(k). In addition, nearly one quarter of continuously contributing HSA account holders1 save most of their contributions, which will help pay for escalating costs of health care in retirement.

On average, 401(k) participants who also contributed to an HSA in 2011 deferred 8.5 percent of their annual salary into their 401(k). Meanwhile, participants that year who only saved in a 401(k) contributed an average of 8.1 percent2.

“During benefit enrollment season, it’s encouraging to see that on average, saving in an HSA is not done at the expense of an employee’s crucial 401(k) retirement savings,” said William Applegate, vice president, Fidelity Investments. “Employers and employees alike are increasingly recognizing the importance of planning for current and future health care costs and many are beginning to integrate this tax-advantaged product into their overall retirement strategy.”

The average 401(k) balance3 for participants4 earning $40,000 to $60,000 per year and saving in both their workplace savings plan and an HSA was $63,600. In contrast, those in the same income bracket who saved only in a 401(k) had an average balance of $46,100, 28 percent less. Similarly, those earning $100,000 to $150,000 per year and saved in both vehicles had an average 401(k) balance of $226,800. But for those saving in a 401(k) alone, the average balance was $174,200, 23 percent less.

One Quarter of Account Holders Save Contributions for Future Health Care Costs
As it did last year, Fidelity categorized its HSA account holders as Spenders, Hybrids and Savers. Of Fidelity HSA account holders:

• 23 percent are Savers, those who spend only 10 percent or less of their annual contributions, electing to invest their remaining balances for health care costs in retirement
• 33 percent are Spenders, those who spend 90 percent or more of their annual contributions on qualified medical expenses
• 44 percent are Hybrids, those that both spend their contributions but also leave year-end remaining balances

In 2011, the average HSA balance and contribution dropped slightly from 2010. But for Savers and Hybrids, average balances rose in 2011 and over the previous two years.

Fidelity studied its HSA account holders who made continuous contributions to an HSA over the three years 2009 to 20115 and uncovered an increased average balance across all categories of 59 percent, from $3,200 to $5,100. But Savers saw a more than 100 percent increase in average balances, from $5,900 to $12,100. For Hybrids, average balances grew 79 percent, from $3,300 to $5,900.

“Our data show that over time, these accounts are becoming meaningful long-term savings vehicles for many Americans as they prepare for the escalating health care costs expected in retirement,” said Applegate.

About Fidelity Investments
Fidelity Investments is one of the world’s largest providers of financial services, with assets under administration of $3.7 trillion, including managed assets of $1.6 trillion, as of August 31, 2012. Founded in 1946, the firm is a leading provider of investment management, retirement planning, portfolio guidance, brokerage, benefits outsourcing and many other financial products and services to more than 20 million individuals and institutions, as well as through 5,000 financial intermediary firms. For more information about Fidelity Investments, visit www.fidelity.com.

Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

The 2012 HSA contribution limit for an individual is $3,100 and the limit for families is $6,250. The catch-up provision for those age 55+ remains at $1000.

Fidelity Brokerage Services LLC, Member NYSE, SIPC
900 Salem Street, Smithfield, RI 02917

Fidelity Investments Institutional Services Company, Inc.
100 Salem St., Smithfield, RI 02917

628627.2.0
© 2012 FMR LLC. All rights reserved.

1) Of continuously contributing HSA participants from 2009-2011.
2) As of year-end 2011.
3) Average balance and deferrals from 2011.
4) Represents average defined contribution assets per individual for Fidelity recordkept plans excluding tax-exempt (where Fidelity provides non-discrimination testing).
5) Represents 26,606 participants; HSA participants are categorized by their year-end 2011 category.