How Much Can Be Contributed to a HSA Annually?

Health Savings Accounts (HSAs) are a valuable tool that can help individuals save for medical expenses while enjoying tax benefits. One common question that arises regarding HSAs is how much can be contributed to them annually.

The annual contribution limit for a Health Savings Account is set by the IRS and can change from year to year. For 2021, the maximum contribution amounts are:

• $3,600 for individuals with self-only coverage
• $7,200 for individuals with family coverage

It's important to note that individuals who are 55 or older can make an additional catch-up contribution of $1,000 per year. This means older individuals can contribute even more to their HSA to help cover medical expenses in retirement.

Contributions to an HSA are tax-deductible, meaning they can lower your taxable income for the year. Additionally, the money in an HSA can be invested and grow tax-free, providing even more potential savings over time.

Knowing the annual contribution limits for an HSA can help individuals plan their healthcare expenses effectively and take full advantage of the tax benefits that come with these accounts.

Health Savings Accounts (HSAs) are an incredible financial tool for those looking to secure funds for healthcare expenses while reaping tax advantages. Understanding the annual contribution limits is vital for maximizing the benefits of your HSA.