How Much Should I Contribute to My HSA?
Key takeaways:
Every year, contribute as much to your health savings account (HSA) as you’re able to — within the IRS limits. When calculating your annual contribution, consider your expected healthcare costs, annual insurance deductible, lifestyle, and future medical expenses.
For 2025, you can contribute up to $4,300 to an HSA if you have individual coverage and $8,550 if you have family coverage.
The HSA contribution limits increase to $4,400 for individual coverage and $8,750 for family coverage in 2026.
Table of contents
Health savings accounts (HSAs) allow you to set aside pretax dollars to pay for qualified healthcare expenses, such as hearing aids and vision expenses, that are not covered by your insurance plan. Unlike a flexible spending account (FSA), an HSA lets you roll money over from year to year, and you can invest your unspent funds. The earnings in your account grow tax free, which can help you increase your HSA balance over time.
But there is a limit to how much you can contribute to your HSA every year. You can contribute the maximum amount allowed by the IRS or a lower amount, depending on your healthcare needs and financial situation. In 2024, the average employee HSA contribution was $2,341, according to one report.
What is an HSA contribution?
An HSA contribution is the amount of money you set aside in a tax-advantaged HSA to cover qualified medical expenses. There are two ways to make HSA contributions: pretax or after tax.
Pretax contributions: If you have an HSA through your employer, you typically contribute pretax dollars. Your company may let you set up automatic payroll deductions to transfer money to your HSA from every paycheck.
After-tax contributions: If you are self-employed, you may contribute to an HSA after tax. You’ll be able to deduct your HSA contributions on your tax return to claim your tax benefits. Self-employed individuals can open an HSA account through a bank, brokerage, or insurance company. Your HSA provider will send you a Form 5498-SA to help you report your annual contribution amount on your tax return. Instead of receiving a tax break up front, you will receive a deduction when you file your tax return.
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When you contribute to an HSA, you can gain access to the following benefits:
Pay for qualified medical expenses with tax-free dollars
Invest your funds in assets, such as exchange-traded funds and stocks
Take your HSA with you if you switch jobs or health plans
How much should you put in your HSA per year?
There is a maximum amount that you can contribute to your HSA every year. The IRS sets an annual limit. For anything beyond that amount, you will have to pay a penalty on HSA excess contributions. If you were not HSA eligible for the entire year, your maximum contribution may be lower unless you qualify for the HSA last-month rule. But after reviewing the limits, the best way to determine your annual HSA contribution is to evaluate your financial situation, personal goals, and healthcare needs.
Here are some items to consider when determining your HSA contribution for the year:
What are your estimated out-of-pocket medical costs?
Do you anticipate any life events, such as having a baby or getting married, that will change your healthcare situation?
Do you want to use your HSA to pay for healthcare costs during retirement?
Does your employer contribute to your HSA?
Are you looking for ways to reduce your tax bill this year?
Do you have an emergency fund set up so you don’t have to dip into your HSA to pay for unexpected expenses?
If you want to reduce your tax bill and use funds to pay for qualified medical expenses, you may want to contribute the maximum allowed amount to your HSA. But it’s important to review your finances first, to ensure your contribution won’t put you in a financial jam.
How does a health savings account (HSA) work? Find out how contributing to an HSA can help you save on healthcare costs today and during retirement.
Health savings account (HSA) vs. flexible spending account (FSA): Depending on your healthcare needs, an HSA could offer more flexibility and long-term savings than an FSA.
Can you use your HSA to pay for lip balm? Lip balm is typically HSA-eligible if it meets certain requirements, but here’s what you should know.
What are the HSA contribution limits for 2025 and 2026?
HSA contribution limits for individual and family coverage accounts depend on your age and increase every year. The amount you are allowed to contribute might be lower than the overall maximum amount if you were not HSA eligible for the entire year.
The HSA contribution limits increased from 2025 to 2026. Below are the maximum HSA contribution limits for 2026 if you are under 55:
Coverage | 2025 HSA contribution limits (under 55) | 2026 HSA contribution limits (under 55) |
Self only | $4,300 | $4,400 |
Family | $8,550 | $8,750 |
If you are age 55 or older, you qualify for a catch-up contribution of $1,000. Below are the contribution limits if you are 55 or older.
Coverage | 2025 HSA contribution limits (55 or older) | 2026 HSA contribution limits (55 or older) |
Self only | $5,300 | $5,400 |
Family | $9,550 | $9,750 |
What are the HSA requirements for 2025 and 2026?
Not everyone can contribute money to an HSA every year. You must meet certain IRS requirements to be HSA eligible. Some of the main requirements include:
Insurance coverage: You must be covered under a qualified high-deductible health plan (HDHP). An HDHP is a health insurance policy that has a higher deductible and lower annual premium than a traditional insurance plan. If your spouse’s insurance is a non-HDHP, you can qualify for an HSA only if their policy coverage is not available to you.
Medicare coverage: When you enroll in Medicare, the HSA rules change. Medicare beneficiaries are not allowed to contribute money to an HSA.
Dependent status: You cannot be claimed on someone else’s tax return as a dependent.
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How do employer contributions work?
Your employer can make pretax contributions to your HSA as part of a wellness incentive. But the total contributions from you and your employer cannot exceed the annual limit. Let’s say you are 52 years old and you have individual coverage. If your employer contributes $500 to your account in 2026, you can’t contribute any more than $3,900 for the year.
The total contributions made by you and your employer will be reported on your W-2. You will not have to pay taxes on the amount your employer contributes to your HSA.
What life changes affect your HSA?
Certain life changes may alter the maximum amount you are able to contribute to your HSA. For example, the following events may cause you to go from an individual to a family HSA:
Giving birth or adopting a child
Getting married
Adding your spouse to your health plan after job loss
When you go from individual to family coverage, the amount you can contribute to an HSA goes up. But some events can decrease the amount you can contribute to an HSA, including:
Death of a spouse
Divorce
Changes to your health benefits
Job loss
Your child is no longer a dependent or is over age 25
Your age also affects how much you contribute to an HSA. When you turn 55, you will be eligible for an HSA “catch-up” contribution of $1,000. You can contribute an extra $1,000 every year until you enroll in Medicare. After you enroll in Medicare, you are no longer eligible to put money in an HSA.
How do I make changes to my HSA contribution?
If you have an HSA through your employer, ask your human resources representative. Each company has its own policies and procedures for changing your contributions.
If you have an individual account, you can make a change at any time. This can usually be done through an app or a Web portal or on the phone.
How much should I have in my HSA at retirement?
The amount of money you should have in your HSA during retirement depends on your healthcare needs and circumstances.
According to the Fidelity Retiree Health Care Cost Estimate, a single person who is age 65 in 2024 should aim to have about $165,000 saved (after tax) for healthcare expenses during retirement.
You can use your HSA to help cover some or all of your out-of-pocket healthcare costs during retirement. After you turn 65, you can use your HSA to pay for nonqualified healthcare expenses without incurring a penalty.
Strategies for maxing your HSA
Here are some tips to make the most of your HSA this year:
Contribute the maximum amount: Since the money in your HSA does not expire, it’s a good idea to contribute as much as you can each year. The HSA contribution limit for 2025 is $4,300 for individuals and $8,550 for family coverage. For 2026, the HSA contribution limit is $4,400 for individuals and $8,750 for family coverage.
Invest your HSA funds: Your HSA provider may let you invest your money once your balance reaches a certain threshold. Investing these funds in stocks and other assets may increase your savings over time.
Monitor HSA fees: Check to see if there are any fees, such as maintenance or investment fees, associated with your account. If so, you can compare various HSA providers to determine the best one for you.
Use your HSA for qualified expenses: To avoid penalties and taxes, it’s important to confirm that your purchases are HSA eligible. You could face a 20% penalty if you purchase nonqualified expenses with your HSA.
The bottom line
Contributing to a health savings account (HSA) can give you tax benefits on money you save for healthcare expenses. When determining how much you should contribute, it’s important to consider your estimated healthcare costs and life changes. You may also want to find out if your employer plans to contribute to your account. The more money you contribute to your HSA, the more you will have available to pay for qualified medical expenses now and in the future.
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References
Devenir. (2025). 2024 year-end HSA market statistics & trends: Executive summary.
Fidelity Investments. (2024). How to plan for rising health care costs.
Internal Revenue Service. (2025). Form 5498-SA.
Internal Revenue Service. (2025). Publication 969 (2024), health savings accounts and other tax-favored health plans.
This article is solely for informational purposes. This article is not professional advice concerning insurance, financial, accounting, tax, or legal matters. All content herein is provided “as is” without any representations or warranties, express or implied. Always consult an appropriate professional when you have specific questions about any insurance, financial, or legal matter.
