How Much Can You Put in an HSA Over a Year?

Are you curious about how much you can contribute to your HSA (Health Savings Account) in a year? Let's delve into the details to understand the limits and benefits of HSA contributions.

An HSA is a tax-advantaged account that allows individuals with high-deductible health plans to save money for medical expenses. One of the key advantages of an HSA is its contribution limit, which is set by the IRS each year.

For the year 2021, the contribution limits for HSAs are as follows:

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

Here are some essential points to consider regarding HSA contributions:

• Individuals aged 55 and older can make an additional catch-up contribution of $1,000 per year.
• Contributions to an HSA are tax-deductible, reducing your taxable income.
• Any unused funds in the HSA roll over from year to year, allowing for long-term savings.
• HSA funds can be invested, providing the opportunity for growth over time.
• Withdrawals for qualified medical expenses are tax-free.

It's important to note that HSA contribution limits are subject to change, so staying informed about the current limits is crucial for maximizing the benefits of your HSA.

Are you aware of the maximum contributions you can make to your Health Savings Account (HSA) each year? Understanding these limits is essential for effective financial planning!