US Health Savings Account (HSA) Calculator
Welcome to our interactive HSA Calculator. This tool helps you understand how to maximize your Health Savings Account benefits, estimate your potential savings, and plan for future healthcare expenses.
Your HSA Projection
Your HSA strategy is on the right track with room for optimization.
Detailed Analysis
Understanding Health Savings Accounts (HSAs)
A Health Savings Account (HSA) is a tax-advantaged savings account available to individuals enrolled in a High-Deductible Health Plan (HDHP). Funds contributed to an HSA are not subject to federal income tax at the time of deposit, and can be used to pay for qualified medical expenses at any time without federal tax liability.
How HSAs Work
HSAs offer a triple tax advantage: contributions are tax-deductible, earnings grow tax-free, and withdrawals for qualified medical expenses are tax-free. Unlike Flexible Spending Accounts (FSAs), HSA funds roll over year to year if you don't spend them, making them a powerful retirement savings vehicle for healthcare costs.
2023 HSA Contribution Limits
For 2023, the IRS set HSA contribution limits at $3,850 for individuals and $7,750 for families. Individuals aged 55 and older can make an additional $1,000 catch-up contribution. These limits apply to the total contributions from both the account holder and their employer.
Investment Opportunities
Once your HSA balance reaches a certain threshold (typically $1,000-$2,000), many providers allow you to invest in mutual funds, ETFs, and other securities. This investment component can significantly grow your HSA balance over time, creating a substantial healthcare nest egg for retirement.
Qualified Medical Expenses
HSA funds can be used for a wide range of qualified medical expenses including deductibles, dental services, vision care, prescription drugs, and many over-the-counter medications. After age 65, you can withdraw funds for any purpose without penalty (though non-medical withdrawals are subject to income tax).
Frequently Asked Questions
To be eligible for an HSA, you must be enrolled in a qualified High-Deductible Health Plan (HDHP), not be enrolled in Medicare, not be claimed as a dependent on someone else's tax return, and not have any other health coverage that is not an HDHP.
Your HSA is yours to keep regardless of employment changes. Unlike Flexible Spending Accounts, HSA funds are fully portable. You can maintain your existing HSA or transfer the funds to a new HSA provider if desired.
Before age 65, non-medical withdrawals are subject to income tax plus a 20% penalty. After age 65, you can withdraw funds for any purpose without penalty, though non-medical withdrawals will still be subject to ordinary income tax.
The key differences are that HSA funds roll over indefinitely, while FSA funds typically have a "use it or lose it" provision. HSAs also offer investment opportunities, while FSAs generally do not. Additionally, HSAs require an HDHP, while FSAs do not.