How Much Do People Put in HSA Annually?

Health Savings Accounts (HSAs) are a great way for individuals to save money for medical expenses while also enjoying tax benefits. One common question people have is how much they can contribute to their HSA each year. The annual contribution limit for an HSA depends on whether you have self-only or family coverage.

For 2021, the contribution limits are as follows:

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

It's important to note that these limits are subject to change each year based on inflation. Additionally, individuals who are 55 or older can make catch-up contributions of an additional $1,000 per year.

Contributions to an HSA are tax-deductible, meaning you can lower your taxable income by the amount you contribute to your HSA. The funds in an HSA can be used to pay for qualified medical expenses, including deductibles, copayments, and more. Unused funds in an HSA roll over year after year, so you don't have to worry about losing your savings.

Health Savings Accounts (HSAs) are more than just a savings account; they are a smart financial tool that enables individuals to prepare for future medical expenses while enjoying tax advantages. Many people wonder about the maximum contributions they can make to their HSAs each year, and it's a relevant topic given the rising healthcare costs.

In 2021, the contribution limits for HSAs are set at:

• $3,600 for those with self-only coverage.
• $7,200 for families.

Remember, these figures can vary each year based on inflation adjustments. Those aged 55 or older have the added bonus of making a catch-up contribution of an extra $1,000 annually.

The best part? HSA contributions are tax-deductible, which helps to reduce your taxable income. Funds can be used for a wide range of qualified medical expenses, such as hospital visits, prescriptions, and even dental care. Plus, if you don’t use the funds in your HSA, they can roll over every year, ensuring your savings build over time.