Is There a Combined Limit of HSA and IRA Contribution?

Many individuals are familiar with both Health Savings Accounts (HSAs) and Individual Retirement Accounts (IRAs) as popular options for saving and investing money. However, a common question that arises is whether there is a combined limit for contributing to both an HSA and an IRA. Let's explore this topic further to provide clarity on the matter.

When it comes to HSA and IRA contributions, each account has its own annual contribution limit set by the IRS. Here's a breakdown of the limits for 2021:

• HSA contribution limit for individuals: $3,600
• HSA contribution limit for families: $7,200
• IRA contribution limit: $6,000 (or $7,000 for individuals aged 50 and older)

Now, to answer the question - there is no combined limit for HSA and IRA contributions. This means that individuals can contribute up to the maximum allowed amount to both their HSA and IRA in the same tax year, provided they meet the eligibility criteria for each account.

It's important to note that eligibility requirements differ for HSAs and IRAs, so individuals should ensure they meet the criteria for both accounts before contributing. Additionally, contributions to these accounts may offer tax benefits, such as tax deductions or tax-free growth, making them attractive options for saving for healthcare expenses and retirement.

Many individuals are familiar with both Health Savings Accounts (HSAs) and Individual Retirement Accounts (IRAs) as popular options for saving and investing money. It's essential to understand that while both accounts serve distinct purposes, they do not share a contribution limit. In fact, individuals can maximize their savings by contributing the full limits allowed for both accounts.