Retirement can be a daunting prospect, especially when you consider the many expenses seniors face. But if there's one expense that can be extraordinarily painful, it's healthcare. According to Fidelity, it will cost the average 65-year-old couple today $285,000 over the course of retirement, but HealthView Services, a cost projection software provider, has a much higher estimate -- $363,946.

Unfortunately, 48% of Americans have no idea how they'll cover their senior medical bills, according to investment firm Franklin Templeton. That said, 75% of people with a health savings account, or HSA, do have a plan for covering future medical costs. And that means it's worth looking into one yourself.

Older man covering mouth as if coughing while doctor listens through stethoscope pressed against his back

IMAGE SOURCE: GETTY IMAGES.

How can an HSA help you?

There's always the option to save for future healthcare costs by funding your IRA or 401(k). Though these accounts aren't healthcare-specific, that money is yours to spend as you want or need. The benefit of opening an HSA, however, is that you'll have funds specifically earmarked for healthcare. And that can really come in handy later in life.

An HSA is a tax-advantaged savings and investment account that lets you sock away money to pay for medical care. To participate in an HSA, you need to have a high-deductible health insurance plan, which is defined as having an annual out-of-pocket deductible of $1,350 for single coverage or $2,700 for family coverage.

Just as IRA and 401(k) contribution limits change from year to year, so too do HSA limits. For 2019, however, you can contribute up to $3,500 for individual coverage and $7,000 for family coverage. And if you're 55 or older, you can make an additional $1,000 catch-up contribution. Employers can also fund HSAs, but know that any money your company contributes on your behalf counts toward your annual limit.

What can an HSA be used for? Essentially, most common medical expenses, including prescription drugs, copays for tests and procedures, dental care, and eyeglasses. You can also use an HSA to pay for long-term care in retirement, which is huge, since it's a potentially whopping expense that Medicare won't cover.

The beauty of the HSA is that the money you put in gets triple tax-free treatment. Not only are contributions made with pre-tax earnings, but once invested, your money gets to grow tax-free -- and then withdrawals are tax-free, as well, provided they're taken to cover qualified medical expenses.

Don't confuse HSAs with FSAs

Flexible spending accounts, or FSAs, are a good short-term healthcare savings solution. With an FSA, you contribute a certain amount of money in advance to cover your out-of-pocket medical costs for the year, but you're required to use up your balance before your plan year renews or risk forfeiting it.

HSAs work the opposite way. Though you can access the money in your HSA to pay for immediate medical costs, the point of an HSA is to save money and then invest it so it grows into a larger sum, thereby helping you better tackle future healthcare expenses.

Peace of mind and flexibility

The great thing about HSAs is that they make it easy to save specifically for healthcare expenses. And if you're concerned about saving too much for that single expense alone, worry not: Once you turn 65, you can withdraw funds from your HSA and use that money as you please.

If you don't spend it on qualifying medical expenses, you'll be taxed on your withdrawal, though the same would hold true for any distribution you take from a traditional IRA or 401(k). And if you do use it for medical purposes, that tax goes away.

In other words, HSAs are a relatively flexible savings vehicle, so if you're at all concerned about affording healthcare in retirement, it pays to see if you're eligible to open one.