What Percent to an HSA? Understanding HSA Contributions

Contributing to a Health Savings Account (HSA) is a smart way to save for medical expenses while enjoying tax benefits. But how much should you contribute to an HSA?

When deciding what percent to contribute to an HSA, you can consider several factors:

• Your projected medical expenses for the year
• Your current financial situation
• Your eligibility to contribute to an HSA

It's important to contribute an amount that you can afford while also taking advantage of the tax benefits an HSA offers.

Typically, experts recommend contributing the maximum allowed amount to your HSA each year. For 2021, the contribution limits are $3,600 for individuals and $7,200 for families. If you are 55 or older, you can contribute an additional $1,000 as a catch-up contribution.

By contributing the maximum amount to your HSA, you can:

• Lower your taxable income
• Grow your savings tax-free
• Use the funds for qualified medical expenses

Remember that any unused funds in your HSA roll over from year to year, making it a valuable long-term savings tool for healthcare costs in retirement.

Estimating contributions to your Health Savings Account (HSA) should reflect not only your anticipated medical expenses but also your overall financial health, ensuring you can comfortably meet your goals.