10 Reasons to Max Out Your HSA

Health Savings Accounts (HSAs) offer many benefits. Here the top reasons to consider maxing yours out.

As long as you're eligible, you have until the end of each calendar tax year to reach your HSA contribution limit. (Even if your employer's health plan runs mid-year, your HSA always aligns with the calendar year).

  1. HSAs are like a “health 401(k).” Dip into HSA funds anytime to pay for qualified expenses, or—even better—
  2. Let funds build to pay for qualified health care expenses after you retire. 
  3. It’s a personal account. You keep your HSA if you switch jobs or retire, and funds rollover year-after-year.
  4. HSAs are triple tax advantaged. Contributions aren’t federally taxed; funds grow tax-free; and funds used to pay for qualified expenses aren't taxed! (Most state laws treat HSAs similarly, but there are exceptions).
  5. A family member can even contribute to your HSA!
  6. While you must have an HSA-eligible plan to contribute to an HSA, you can always spend funds on qualified health expenses. Even if, in the future, you’re no longer on an HSA-eligible plan.
  7. Once you’re 65 or older, you can use HSA funds for any reason. Taxes will apply for non-qualified expenses, but there’s no longer a 20% penalty.
  8. There’s no time limit for reimbursing yourself. As long as you had an HSA when you incurred the qualified expense, it makes no difference how much time has passed.
  9. If you ever have an unexpected medical need, funds are immediately and readily available for qualified health expenses.
  10. Funds can be used on you, your spouse, and anyone you claim on your Federal Income Taxes*—even if they are not on your health plan. 

*Unless you claim your domestic partner on your Federal Income Taxes, HSA funds cannot be used for them. However, if they have an HSA-eligible plan, they can have their own HSA.

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