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How much should I contribute to my HSA?

Posted January 18, 2022

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How much should I contribute to my health savings account (HSA) each month?

The short answer: As much as you're able to (within IRS contribution limits), if that’s financially viable.

If you’re covered by an HSA-eligible health plan (or high-deductible health plan), the IRS allows you to put as much as $3,650 per year (in 2022) into your health savings account (HSA). If you’re contributing to an HSA, and on a family HDHP, the maximum amount that you can contribute is $7,300 per year (in 2022).  And for those who are 55 or older, you can contribute an extra $1,000 annually for a total of $4,650 or $8,300 for accountholders on a family plan — with catch-up contributions accepted at any time during the year in which you turn 55.

What is an HSA?

A health savings account gives you greater control of your healthcare expenses and potential savings. It also provides an avenue for you build a nest egg for retirement and invest. With an HSA, you experience a triple-tax advantage: Contributions are tax-free, earnings are tax-free, and withdrawals for eligible expenses are tax-free. Accountholders can truly maximize the potential of an HSA by tapping into its investment capabilities.

What is an HSA contribution?

An HSA contribution is the deposit of funds (for example, from a bank account or your paycheck) into your HSA. HSA participants are advised to contribute the maximum amount each year because the dollars going into these accounts are tax-free. All HSA funds carry over from year to year, and your HSA stays with you even when you change jobs. This ensures accountholders are able to save long term for future medical expenses.

Preparing for retirement

One oft-cited estimate: A 65-year-old couple retiring in 2020 will need an average of $351,000 in healthcare costs throughout retirement. If you’re uncomfortable contributing the IRS annual max to your HSA through pre-tax payroll contributions, contribute what you are comfortable with.

An HSA also provides the ability to contribute post-tax dollars and take an above-the-line deduction, essentially reducing taxable income for every post-tax dollar that’s contributed to the HSA.  Additionally, accountholders have up until the tax filing of the following year to make these post-tax contributions for the previous year.

Consider the savings in HDHP premiums

At first glance, contributing the IRS-allowed maximum to your HSA in one year may sound unimaginable.  But when taking into account the premium savings of a HDHP, compared to a traditional health plan, plus tax savings gained through contributing to an HSA, it becomes more realistic.

Need help determining how much you should set aside in your HSA each month? WEX provides a My HSA Planner tool that will help you determine the right amount for you. It takes into account your health plan coverage type, deductible amount, number of years before retirement, monthly healthcare expense and more.

Watch our below Benefits Buzz podcast episode to learn more about the basics of an HSA!

Editor's note: This post was first published in January 2018. It was updated most recently updated in January 2022.

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