Health Savings Account (HSA) Calculator
Project the long-term growth of your HSA and see its power as a retirement tool.
About the Health Savings Account (HSA) Calculator
A Health Savings Account (HSA) is one of the most powerful savings tools available in the United States, offering a unique triple-tax advantage. It's designed for individuals with high-deductible health plans (HDHPs) to save for medical expenses. However, its flexibility and tax benefits also make it an exceptional long-term investment vehicle for retirement. This calculator helps you visualize the potential growth of your HSA over time, demonstrating how your contributions and investment returns can compound into a substantial balance.
The HSA's Triple-Tax Advantage
The power of the HSA comes from its unique tax structure:
- Tax-Deductible Contributions: The money you contribute to an HSA is tax-deductible (or pre-tax if through an employer), lowering your taxable income for the year.
- Tax-Free Growth: Your HSA balance can be invested, and any earnings or interest it generates grow completely tax-free.
- Tax-Free Withdrawals: You can withdraw money from your HSA tax-free at any time to pay for qualified medical expenses. After age 65, you can withdraw funds for any reason, paying only ordinary income tax (similar to a Traditional IRA), but withdrawals for medical expenses remain tax-free.
Frequently Asked Questions (FAQ)
Who is eligible to contribute to an HSA?
To be eligible to contribute to an HSA, you must be covered under a high-deductible health plan (HDHP), not be enrolled in Medicare, and not be claimed as a dependent on someone else's tax return. You should verify that your health plan is HSA-eligible.
What are the HSA contribution limits for 2025?
For 2025, the IRS has set the maximum HSA contribution limits at $4,300 for individuals with self-only HDHP coverage and $8,550 for individuals with family HDHP coverage. Individuals who are age 55 or older at the end of the tax year can contribute an additional $1,000 as a "catch-up" contribution.
What happens to my HSA if I no longer have an HDHP?
If you are no longer covered by a high-deductible health plan, you can no longer make new contributions to your HSA. However, the money already in the account is still yours. You can continue to let it grow through investments and you can use it tax-free for qualified medical expenses at any time.