How Much In a HSA Per Year?

One common question people have about Health Savings Accounts (HSAs) is how much they can contribute in a year. Understanding the annual limits for HSAs is crucial for maximizing the benefits of this financial tool. The contribution limits are set by the IRS and can vary from year to year.

For individuals, the maximum HSA contribution for 2021 is $3,600, while for families, it is $7,200. These limits typically increase slightly each year to account for inflation. It is important to note that individuals aged 55 and older can make additional catch-up contributions of $1,000 per year.

Contributions to an HSA are tax-deductible, meaning you can lower your taxable income by contributing to your account. The funds in an HSA can be used to pay for qualified medical expenses, including deductibles, copayments, and certain other expenses not covered by your health plan.

It's important to remember that the money in an HSA rolls over from year to year, unlike a Flexible Spending Account (FSA) where funds may be forfeited if not used by the end of the year. This makes HSAs a valuable long-term savings tool for healthcare costs in retirement.

When considering how much you can invest in a Health Savings Account (HSA) each year, it’s important to recognize the limits set by the IRS. For 2021, individuals can contribute up to $3,600 and families can contribute up to $7,200. These limits are subject to annual updates, typically increasing based on inflation.