How Much Should You Put into HSA?

One of the common questions people have about Health Savings Accounts (HSAs) is how much they should contribute to it. Understanding how much to put into your HSA can help you make the most of this tax-advantaged savings account.

When deciding how much to contribute to your HSA, consider your current health needs, expected medical expenses, and your budget. Here are some factors to keep in mind:

• Assess your healthcare needs: Evaluate how often you visit the doctor, take medications, or anticipate any upcoming medical procedures.
• Review your health insurance plan: Determine the out-of-pocket costs you are responsible for, such as deductibles, copayments, and coinsurance.
• Estimate future medical expenses: Consider any planned medical treatments or procedures that may require significant out-of-pocket expenses.
• Maximize tax savings: Contribute enough to your HSA to maximize your tax benefits and take advantage of potential growth through investments.
• Contribute regularly: Make consistent contributions to your HSA throughout the year to build up savings for current and future medical expenses.

There is an annual contribution limit set by the IRS each year for HSAs. In 2021, the contribution limit for individuals is $3,600, and for families, it is $7,200. If you are above the age of 55, you can make an additional catch-up contribution of $1,000.

Ultimately, the amount you should put into your HSA depends on your individual circumstances and financial goals. Consult with a financial advisor or healthcare provider to determine the right contribution amount for you.

Deciding how much to put into your Health Savings Account (HSA) can feel daunting, but breaking it down makes the process easier. Start by considering your healthcare needs, such as past medical costs and any expected treatments this year.