How much can I put in my HSA annually?

Health Savings Accounts (HSAs) are a great way to save for medical expenses while enjoying tax benefits. One common question among HSA holders is, 'How much can I contribute to my HSA annually?'

For 2021, the annual contribution limits for HSAs are:

• Individual coverage: $3,600
• Family coverage: $7,200

These limits are set by the IRS and may change each year. It's essential to stay updated on any changes to maximize your HSA benefits.

Contributions to an HSA can be made by the account holder, their employer, or both. If you're 55 or older, you can make an additional catch-up contribution of $1,000 per year.

It's important to note that these contributions are tax-deductible, grow tax-free, and can be withdrawn tax-free for qualified medical expenses. However, if you withdraw funds for non-medical expenses before age 65, you may be subject to taxes and penalties.

Maximizing your HSA contributions can help you build a substantial healthcare fund for current and future medical needs. Consult with a financial advisor to understand how an HSA fits into your overall financial plan.

When considering how much you can contribute to your Health Savings Account (HSA) annually, it's vital to keep yourself informed about the limits set by the IRS. As of 2021, these limits were $3,600 for individual coverage and $7,200 for family coverage. Ensuring you meet these limits each year can significantly enhance your overall tax savings.