Does HSA Have a Limit of Contribution?

Health Savings Accounts (HSAs) are versatile savings tools that offer tax benefits for qualified medical expenses. One common question that individuals have about HSAs is whether there is a limit on contributions.

Yes, there are limits on how much you can contribute to an HSA each year. These limits are set by the IRS and can vary depending on whether you have self-only or family coverage under a high-deductible health plan.

For 2021, the contribution limits are:

• Self-only coverage: $3,600
• Family coverage: $7,200

Individuals who are 55 or older are eligible to make an additional catch-up contribution of $1,000 per year. It's important to note that these limits are subject to change each year, so be sure to check the current limits before contributing to your HSA.

Contributions to an HSA are tax-deductible, grow tax-free, and can be withdrawn tax-free for qualified medical expenses. Any unused funds in the account roll over year after year, making HSAs a valuable long-term savings tool for healthcare costs.

Health Savings Accounts (HSAs) not only serve as a financial cushion for medical expenses, but they also come with annual contribution limits that you should be aware of. The IRS determines these limits, which differ for individuals with self-only versus family coverage under high-deductible health plans.