Key takeaways:
Every year, contribute as much to your health savings account (HSA) as you’re able to — within the IRS-set limits. When calculating your annual contribution, consider your expected healthcare costs, annual insurance deductible, and lifestyle.
For 2025, you can contribute up to $4,300 to an HSA if you have individual coverage or $8,550 if you have family coverage.
The HSA contribution limits will increase to $4,400 for people with individual coverage and $8,750 for people with family coverage in 2026.
A health savings account (HSA) allows you to set aside pretax dollars to pay for qualified healthcare costs, 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, which is determined by the IRS. And depending on your healthcare needs and financial situation, you may not want to contribute the maximum amount. In 2024, the average employee HSA contribution was $2,341, according to one report.
What is an HSA contribution?
An HSA contribution is money you set aside in your account to pay for qualified medical expenses. If you set up an HSA through your employer, contributions are usually made through pretax payroll deductions. If you’re self-employed, you contribute after-tax dollars and deduct the amount when you file your taxes. (Your HSA provider will send you a Form 5498-SA to help you report your annual contribution amount on your tax return.) Either way, you get tax benefits that help you save on healthcare costs.
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 this annual limit. If you contribute anything beyond that amount, you will have to pay a penalty on excess HSA contributions. If you were not HSA eligible for the entire year, your maximum contribution limit may be lower than the standard amount — unless you qualify for the HSA last-month rule.
You also may not want to contribute the maximum amount every year. The best way to determine your annual HSA contribution is to evaluate your financial situation, personal goals, and healthcare needs.
Here are some questions 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 your finances allow, contributing the maximum amount to your HSA can help you take full advantage of the triple tax benefits:
Tax-deductible (or pretax through payroll) contributions: The money you contribute to your HSA reduces your overall taxable income, which can lower your tax bill for the year.
Tax-free growth: If you invest your HSA funds, any interest, dividends, or capital gains you earn are not taxed, unlike with a regular investment account.
Tax-free withdrawals for eligible healthcare costs: You won’t pay taxes on HSA funds you use for eligible healthcare costs, whether that’s now or in retirement.
What are the HSA contribution limits for 2025 and 2026?
HSA contribution limits are affected by account holders’ age and typically increase every year. The amount you are allowed to contribute might be lower than the standard maximum if you were not HSA eligible for the entire year.
Health savings accounts (HSAs) vs. flexible spending accounts (FSAs): Depending on your healthcare needs, an HSA could offer more flexibility and long-term savings than an FSA.
How does an HSA work? Find out how contributing to an HSA can help you save on healthcare costs today and during retirement.
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.
The HSA contribution limits are increasing from 2025 to 2026. Below are the maximum HSA contribution limits for 2025 and 2026 for people who are under 55.
Coverage type | 2025 HSA contribution limit (for people under 55) | 2026 HSA contribution limit (for people under 55) |
Individual | $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 type | 2025 HSA contribution limit (for people 55 or older) | 2026 HSA contribution limit (for people 55 or older) |
Individual | $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 contribute. Here are how some of the main requirements work:
Insurance coverage: You must be covered under an HSA-eligible health plan to contribute to an HSA. In 2025, this means being enrolled in 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 you’re eligible for non-HDHP coverage through a spouse, you’re not eligible for an HSA.
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 and contribute to an HSA.
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Starting in 2026, certain Affordable Care Act (ACA) bronze and catastrophic plans will also qualify as HSA-eligible health plans under the One Big Beautiful Bill Act. This expansion means that more people will be able to open and contribute to HSAs without having to switch to a traditional HDHP.
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.
So let’s say you are 52 years old and you have individual coverage. If your employer contributes $500 to your HSA in 2026, you can’t contribute more than $3,900 for the year.
The total contributions made by you and your employer will be reported on your W-2 every year. You will not have to pay taxes on the amount your employer contributes to your HSA.
What life events can affect your HSA?
Certain life events may alter the maximum amount you are able to contribute to your HSA. For example, the following events may cause you to switch from individual to family coverage:
Giving birth or adopting a child
Getting married
Adding your spouse to your health plan because they lose their job (or vice versa)
If you go from having 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 no longer being a dependent or on your health plan
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 about making changes to your contribution amount. Every company has its own policies and procedures for changing contribution amounts.
If you have individual coverage, you can make a change at any time. This can usually be done through an app or a web portal or over the phone.
How much should I have in my HSA at retirement?
According to Fidelity’s 2025 Retiree Health Care Cost Estimate, a 65-year-old should aim to have about $172,500 saved (after taxes) for healthcare expenses during retirement. Though, your actual healthcare costs during retirement will depend on your personal health, medical needs, and lifestyle choices.
HSA funds can serve as an important complement to your other retirement savings. HSA funds roll over from year to year, never expire, and offer tax-free growth when invested. After age 65, you can use HSA funds for nonmedical expenses without incurring a penalty. You’ll just have to pay income taxes on the money you use for nonqualified expenses.
Here are a few items to consider when setting HSA goals for retirement:
How much you can contribute each year: You can only contribute to an HSA during the months you’re enrolled in an HSA-eligible health plan.
Your current and future health status: Chronic conditions, frequent visits to healthcare professionals, or a family history of medical issues could mean higher out-of-pocket expenses in retirement.
When you plan to retire: If you retire before you’re eligible for Medicare, you may need to use your HSA to cover years of medical costs on your own.
How you’re investing your HSA: Letting your HSA grow in investment options instead of keeping it in cash could help you build a larger balance by retirement. However, returns are not always guaranteed.
Your overall savings plan: Consider your savings goals for other accounts, such as a 401(k), individual retirement account (IRA), and/or pension, to help you set HSA goals.
Strategies for maxing out 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 people with family coverage. For 2026, the HSA contribution limit is $4,400 for individuals and $8,750 for people with 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 if there’s a better 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 pay for nonqualified expenses with your HSA.
Frequently asked questions
To open and contribute to an HSA, you must be enrolled in an HSA-eligible health plan. At the moment, that usually means an HDHP, though certain ACA bronze and catastrophic plans will also qualify starting in 2026 under the One Big Beautiful Bill Act.
You can set up an account through an HSA provider, such as a bank, credit union, brokerage, or HSA administrator. If your employer offers an HSA, contributions are typically made through pretax payroll deductions. If you’re self-employed or don’t have access to an HSA through work, you can open an account directly.
If you pay for qualified medical expenses out of pocket, you can submit a reimbursement request to your HSA provider. You may need to upload a receipt or complete a short form through the provider’s app or website. Once the request is submitted and approved, funds are typically transferred to your bank account or sent by check. You can also pay for your expenses with an HSA debit card if your provider offers one. Be sure to keep all receipts for your records in case of an IRS audit.
You can check your HSA balance by logging into your account provider’s website or mobile app. Most platforms will show your current balance, investment activity, and recent transactions. If your HSA comes with a debit card, the provider’s customer service number may offer automated balance updates.
To open and contribute to an HSA, you must be enrolled in an HSA-eligible health plan. At the moment, that usually means an HDHP, though certain ACA bronze and catastrophic plans will also qualify starting in 2026 under the One Big Beautiful Bill Act.
You can set up an account through an HSA provider, such as a bank, credit union, brokerage, or HSA administrator. If your employer offers an HSA, contributions are typically made through pretax payroll deductions. If you’re self-employed or don’t have access to an HSA through work, you can open an account directly.
If you pay for qualified medical expenses out of pocket, you can submit a reimbursement request to your HSA provider. You may need to upload a receipt or complete a short form through the provider’s app or website. Once the request is submitted and approved, funds are typically transferred to your bank account or sent by check. You can also pay for your expenses with an HSA debit card if your provider offers one. Be sure to keep all receipts for your records in case of an IRS audit.
You can check your HSA balance by logging into your account provider’s website or mobile app. Most platforms will show your current balance, investment activity, and recent transactions. If your HSA comes with a debit card, the provider’s customer service number may offer automated balance updates.
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 other factors. 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
American Bankers Association. (2025). New HSA expansion included in federal budget bill. ABA Banking Journal.
Devenir. (2025). 2024 year-end HSA market statistics and trends: Executive summary.
Fidelity Investments. (2025). Fidelity Investments releases 2025 retiree health care cost estimate, a timely reminder for all generations to begin planning.
Internal Revenue Service. (2025). Form 5498-SA.
Internal Revenue Service. (2025). Publication 969 (2024), health savings accounts and other tax-favored health plans.
