Health Savings Account Contribution Jump

The IRS is giving you some help. Yes, really. The IRS recently announced that the contribution limits for Health Savings Accounts (HSAs) are getting a big boost in 2024, thanks to inflation.

HSA Contribution Limit Increase

The yearly limit for contributions to individual HSA plans is jumping from $3,850 this year to $4,150 in 2024.

For family HSAs, the yearly limit is increasing from $7,750 to $8,300. That’s quite a big increase. Before this jump, the average increase in HSA contribution limits was about 1.7 percent. Compare that to the increase between this year and next year, which is 8 percent for a family plan and 7 percent for an individual plan. That’s a lot more potential savings on healthcare and growth for retirement (if you’re investing your HSA bucks for the long term), not to mention tax savings now.

Paired with a High-Deductible Plan

To qualify for an HSA, you must have a high-deductible health insurance plan. According to the IRS, that means a deductible of at least $1,600 for an individual plan and $3,200 for a family plan.

Benefits of an HSA

If you do qualify for an HSA, you should think about taking advantage of its many benefits. Not only is it a great way to save for medical expenses now, but it’s also good for stashing money for medical costs (and even others) during retirement. This is because HSA contributions are made pre-tax, your money grows tax-free, and when you make qualified medical withdrawals it’s tax-free. That’s three great reasons to take a look at HSAs. Especially now that the contribution limits are getting such a big boost.

Original article by Chris O'Shea and adapted in partnership with SavvyMoney.

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