Can I Max Out Contributions to a 401(k) and a HSA in the Same Year?

Many people wonder whether they can maximize their contributions to both a 401(k) and a Health Savings Account (HSA) in the same year. The short answer is yes, you can contribute to both accounts in the same year, but there are some important details to consider.

Contributing to a 401(k) and an HSA simultaneously can offer you significant tax advantages and help you save for both retirement and medical expenses.

Here are some key points to keep in mind:

• You can contribute to both a 401(k) and an HSA in the same year.
• Contributions to a 401(k) are made pre-tax, reducing your taxable income for the year.
• Contributions to an HSA are also tax-deductible, and withdrawals for qualified medical expenses are tax-free.
• The contribution limits for a 401(k) and an HSA can change each year, so it's important to stay informed.
• For 2021, the contribution limit for a 401(k) is $19,500 for individuals under 50 and $26,000 for those 50 and older.
• The contribution limit for an HSA in 2021 is $3,600 for individuals and $7,200 for families.
• If you are able to max out contributions to both accounts, you can enjoy significant tax savings and bolster your retirement and healthcare savings simultaneously.

By taking advantage of both a 401(k) and an HSA, you can create a comprehensive financial plan that prepares you for retirement while also covering potential medical expenses tax-efficiently.

Absolutely, you can maximize your contributions to both a 401(k) and a Health Savings Account (HSA) in the same calendar year! Doing so not only diversifies your savings but also opens the door to numerous tax benefits.