What is the contribution limit for an HSA?

Health Savings Accounts (HSAs) are a valuable tool for individuals to save and pay for medical expenses tax-free. One of the key aspects to understand about an HSA is the contribution limit.

The contribution limit for an HSA can vary each year. For 2021, the contribution limit for an individual is $3,600, and for a family, it's $7,200. These limits are set by the IRS and are subject to change each year based on inflation.

It's important to note that individuals who are 55 or older can make additional catch-up contributions of $1,000 per year. This allows older individuals to save even more for their healthcare expenses in retirement.

Contributions to an HSA can be made by the individual, their employer, or both. If both the individual and their employer contribute to the HSA, the total contributions cannot exceed the annual limit set by the IRS.

Understanding Health Savings Accounts (HSAs) is crucial as they offer individuals a way to save and pay for medical expenses without incurring taxes. The contribution limits established by the IRS ensure that both individuals and families can effectively manage their healthcare costs.