What is the most you can deposit in an HSA? Understand HSA limits and benefits

When it comes to Health Savings Accounts (HSAs), many individuals wonder about the maximum amount they can contribute. For 2021, the annual contribution limits for HSAs are $3,600 for individuals and $7,200 for families.

However, for those aged 55 and older, an additional catch-up contribution of $1,000 is allowed each year. This means individuals aged 55 and older can contribute up to $4,600, and families in the same age group can contribute up to $8,200 annually.

These contributions are pre-tax, meaning they are deducted from your taxable income, providing a valuable tax benefit. The funds in an HSA can be used for qualified medical expenses, including co-pays, deductibles, prescriptions, and more.

It's important to note that the contribution limits are set by the IRS and may change each year, so it's essential to stay informed about the current limits. Additionally, unused funds in an HSA can be rolled over from year to year, unlike a Flexible Spending Account (FSA), making HSAs a valuable long-term savings tool.

Understanding your Health Savings Account (HSA) contribution limits is crucial for maximizing your savings and ensuring you can cover future healthcare costs. For the year 2023, the contribution limits have changed, with a maximum of $3,850 for individual plans and $7,750 for family plans. This means you have a fantastic opportunity to save more as healthcare costs rise.