
No matter how healthy you are and how great your health insurance is, you will always have out of pocket medical costs. One of the best ways to combat out of pocket health expenses is a Health Savings Account. Whether you’re considering opening an HSA account or you’ve had one for years, it’s important to know how to maximize the benefits of an HSA. Keep reading to learn how to make the most out of your HSA.
- Maximize Your Contributions
HSA’s have triple tax benefits: your contributions, earnings, and withdrawals are all tax free. These types of accounts are categorized as savings accounts but also act as investment accounts by allowing your balance to roll over each year. By beginning to contribute to an HSA early on in your life, you give your HSA the potential to compound interest and grow your HSA savings over time.
The HSA contribution limits for 2022 are $3,650 for individuals and $7,300 for family coverage. If you’re 55 years old or older, you are allowed $1,000 extra as a catch-up contribution.
If you have an employer sponsored 401(k) and a HSA account through your health insurance, a good way to maximize savings is contributing enough into your 401(k) to maximize your company’s match policy, then putting the rest into your HSA.