Health Savings Account

## Health Savings Account (HSA)

An HSA is the only account in the US tax code with triple tax advantages: tax-deductible contributions, tax-free investment growth, and tax-free withdrawals for qualified medical expenses.

### Limits (2025)

| Coverage | Contribution Limit |
|----------|-------------------|
| Individual | $4,300 |
| Family | $8,550 |
| Catch-up (55+) | Additional $1,000 |

### Requirements

Must be enrolled in a High Deductible Health Plan (HDHP):
- Minimum deductible: $1,650 (individual), $3,300 (family).
- Maximum out-of-pocket: $8,300 (individual), $16,600 (family).

### Key Advantages

- Contributions reduce taxable income.
- Investments grow tax-free.
- Withdrawals for medical expenses are tax-free at any age.
- After age 65, non-medical withdrawals are taxed as income (like a Traditional IRA).
- No 'use it or lose it' rule — funds roll over indefinitely.
- Portable (follows the individual, not the employer).

Financial advisors often recommend maxing out HSA contributions even before increasing 401(k) contributions above the employer match.