Model your Health Savings Account balance over time — including tax savings, employer contributions, and investment growth.
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A Health Savings Account (HSA) lets you save pre-tax money for qualified medical expenses. To be eligible, you must be enrolled in a High-Deductible Health Plan (HDHP) — in 2024, that means a deductible of at least $1,600 (self-only) or $3,200 (family). You cannot be enrolled in Medicare or claimed as a dependent.
HSAs offer three tax advantages: (1) Contributions are pre-tax or tax-deductible, reducing your taxable income. (2) Investment growth is tax-free. (3) Withdrawals for qualified medical expenses are tax-free. No other account type offers all three simultaneously.
Yes — most HSA providers allow you to invest your balance once it exceeds a threshold (typically $1,000–$2,000). Many financial advisors recommend a "pay out of pocket now, invest and grow, reimburse yourself later" strategy to maximise investment time.
Unlike FSAs, HSA funds roll over indefinitely — there is no use-it-or-lose-it rule. After age 65, you can withdraw for any reason (like a traditional IRA), but non-medical withdrawals are taxed as ordinary income.
Qualified expenses include deductibles, copays, prescriptions, dental, vision, mental health care, and many more. See IRS Publication 502 for the full list. Non-qualified withdrawals before age 65 incur a 20% penalty plus income tax.
The HSA Calculator models how your Health Savings Account could grow over time when you contribute regularly and invest the balance. Enter your annual contribution, any employer contribution, an expected annual investment return, your tax bracket, and the number of years you plan to let the account grow. The calculator shows your projected balance year by year, the total tax savings from your contributions (since HSA contributions are pre-tax), and how the investment growth compounds over time. This makes it easy to visualise whether maxing out your HSA each year could meaningfully supplement your retirement savings.
A Health Savings Account is a tax-advantaged savings account available to US residents enrolled in a High-Deductible Health Plan (HDHP). HSAs have a rare triple tax advantage: contributions are pre-tax (or tax-deductible if made outside payroll), investment growth is tax-free, and withdrawals for qualified medical expenses are also tax-free. For 2024, the IRS contribution limits are $4,150 for self-only coverage and $8,300 for family coverage, with a $1,000 catch-up contribution available to those aged 55 and over. Unused balances roll over every year — there is no "use it or lose it" rule — which makes HSAs an excellent long-term savings vehicle for healthcare costs in retirement.
One of the most powerful HSA strategies is to invest the balance in index funds rather than leaving it as cash, and to pay current medical expenses out-of-pocket while saving receipts. You can reimburse yourself for any qualified medical expense at any point in the future — even years later — so the invested money can grow tax-free for decades before you withdraw it. After age 65, HSA funds can also be withdrawn for any purpose (not just medical) with only ordinary income tax due, making it function similarly to a traditional IRA. This makes maximising your HSA a compelling retirement strategy alongside your 401(k) and Roth IRA.
You must be enrolled in an IRS-qualified High-Deductible Health Plan (HDHP), not be enrolled in Medicare, not be claimed as a dependent on someone else's return, and not have other non-HDHP health coverage. For 2024, an HDHP must have a minimum deductible of $1,600 (self-only) or $3,200 (family) and a maximum out-of-pocket of $8,050 (self-only) or $16,100 (family).
For 2024, the IRS limits are $4,150 for self-only HDHP coverage and $8,300 for family coverage. Account holders aged 55 or older can make an additional $1,000 catch-up contribution on top of these limits.
The IRS defines qualified medical expenses broadly in Publication 502. They include doctor visits, prescriptions, dental and vision care, mental health services, and many over-the-counter medications. Non-qualified withdrawals before age 65 are subject to income tax plus a 20% penalty; after age 65, only ordinary income tax applies.
Yes — most HSA providers allow you to invest your balance once it exceeds a minimum threshold (often $1,000). Investment options typically include mutual funds and ETFs. Investing the balance is what turns an HSA from a simple reimbursement account into a powerful long-term savings vehicle.
No. HSA balances roll over indefinitely — there is no year-end forfeiture rule. The account is yours even if you change jobs, switch health plans, or retire. You can continue to use the balance for qualified medical expenses tax-free at any age.