Are you contributing enough to your Health Savings Account (HSA) each year? While figuring this out may seem complicated, there are several strategies you can use to help decide how much to contribute to your account. Keep reading to learn more about the benefits of each option.
The Internal Revenue Service (IRS) limits how much can be contributed to an HSA. This amount is typically adjusted for inflation each year. In 2026, the limit is $4,400 for individual coverage and $8,750 for family coverage. For those ages 55 or older, an extra $1,000 “catch-up” contribution amount is permitted.
Keep in mind that Health Savings Accounts offer a unique triple tax advantage: your contributions are tax-free, any interest or investment earnings grow tax-free, and withdrawals for eligible medical expenses are also tax-free. This makes HSAs an effective way to save for current and future healthcare costs while helping to reduce your overall tax burden.
Here are some options to consider when choosing how much to contribute to your HSA:
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How much to contribute |
Details |
Benefits |
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Match your employer’s contribution |
Your employer may choose to make contributions directly to your HSA. This can occur as a lump sum at the beginning of the year,periodically (e.g., monthly or quarterly), or based on specific conditions, like matching your contributions. |
Taking full advantage of employer contributions available can help maximize your savings. This is especially important if your employer offers a matching program so you're not leaving money on the table. Employer contributions made to your account are yours to use right away for eligible medical expenses or save them for future healthcare needs. Keep in mind that employer contributions do count towards your maximum annual contribution limit. |
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Annual contribution limit |
In 2026, the maximum HSA |
By contributing the maximum amount, you fully leverage available tax benefits, which can save you significant money over time. Funds roll over year to year and don’t expire, so maxing out contributions can help you build a larger balance for the future. After age 65, you can use HSA funds for non-medical expenses without penalties (though withdrawals will be taxed like regular income). This makes the HSA a retirement tool alongside 401(k)s and IRAs. |
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Your medical insurance deductible |
Your deductible is the amount you must pay before your insurance begins to cover expenses. |
By contributing enough to your HSA to cover your deductible each year, you can be more prepared for medical expenses without dipping into your regular budget or emergency savings. |
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HDHP Out-of-Pocket |
Your out-of-pocket |
You can set a goal to save enough to cover your outof-pocket maximum to be prepared for the “worstcast” scenario. Depending on your health insurance plan, your out-of-pocket maximum may be more than you can contribute to your HSA in one year. Fortunately, because funds roll over from year-to-year, you can make a goal of saving over multiple years. |
To figure out which option is best for you, consider how financially prepared you are for unexpected non-medical costs. If you aren’t financially stable enough for these unexpected costs, contributing the maximum amount to an HSA may not be the best option for you. Instead, you could consider splitting your savings between your HSA and a liquid (easily accessible) savings account.
Next, consider accounting for all your yearly medical expenses. For example, if you spend $100 each month on a prescription, you could contribute at least $1,200 to your HSA. This will allow you to enjoy the tax advantages on money you will already be spending on healthcare needs. Another option is to consider contributing the full amount of your annual medical insurance deductible, so your initial out-of-pocket costs will be covered in the event you have a large bill or medical emergency.
If you feel financially stable enough, consider contributing the maximum amount to your HSA. If you don’t use all the funds within a year, the amount will roll over without a maximum account balance limit. You may also have the option to invest your HSA funds. This can help increase your tax-free growth, retirement savings, and asset growth. If you are considering investing your HSA, it's important to note you will have to maintain both the required minimum investment balance and the amount of money you anticipate using on your eligible medical expenses for the year.
Understanding how much to contribute to your HSA is key to getting the most of your account. Explore more about how HSAs can help you save for the future
HSA contributions are not subject to federal and most states’ income tax. State income tax may apply in California and New Jersey. Please consult a tax advisor for your state’s specific rules.
This blog is up to date as of October 25 and has not been updated for changes in the law, administration or current event.
