Maximize Your HSA: There’s Still Time to Contribute for 2024!

Did you fully fund your Health Savings Account (HSA) for 2024? The contribution limits were $4,150 for individuals and $8,300 for families. If you didn’t hit the maximum last year, don’t worry—you still have until April 15, 2025, to make prior-year contributions!

Why It’s Worth It

If you’re able to contribute the full amount to your HSA each year, you’re setting yourself up for significant tax-free financial growth.

The Triple Tax Advantage

HSAs offer unmatched tax benefits:

• Tax-free contributions

• Tax-free growth

• Tax-free withdrawals for qualified medical expenses

A Smart Retirement Strategy

While HSAs are designed for medical expenses, they can also serve as a powerful retirement savings tool. If you can pay for medical costs out-of-pocket and leave your HSA funds untouched, your savings will continue to grow tax-free. Once you turn 65, you can use HSA funds for non-medical expenses as well—just note that regular income tax will apply to those withdrawals.

Grow Your Wealth Tax-Free

HSA funds aren’t just for saving—they’re for growing. Unlike a traditional savings account that may earn just 1-2% interest, HSAs allow you to invest in mutual funds, stocks, and bonds, enabling exponential growth. Plus, all interest and investment gains are tax-free. Just be sure to keep some cash available for any unexpected healthcare costs.

More Contributions = More Financial Security

Even if you can’t contribute the maximum, making regular deposits into your HSA is crucial. If you’re married, consider splitting your HSA into two accounts—each spouse can make an additional $1,000 catch-up contribution once they turn 55. And if you haven’t been maximizing your HSA yet, it’s never too late to start! Even beginning at age 50 can lead to a solid financial cushion during retirement. (Just keep in mind that once you enroll in Medicare, you can no longer contribute to an HSA.)

Bonus: A Potential Tax Break!

Making a prior-year HSA contribution could lower your federal tax bill! Contributions made directly to your HSA are tax-deductible, meaning 100% of what you put in could be a tax write-off.

Time is running out—make the most of your HSA today!

Sources:

“Everything You Need to Know About MHSA Investments”
MotivHealth

“Looking for a Tax Break? Making a Prior-Year Contribution to Your HSA Could Help You Out”
Bank of America

“Maximizing Your HSA”
MotivHealth

“There’s Still Time to Contribute to an IRA or an HSA for 2021. Why It Makes Sense to Do So Now”
Carmen Reinicke