The IRS has announced an increase in the health savings account (HSA) contribution limit for 2025. Self-only coverage will have a new limit of $4,300, up from $4,150 in 2024. Family plans will also see an increase to $8,550 from $8,300 in 2024. In order to qualify for contributions, individuals must have an eligible high-deductible health insurance plan with a minimum deductible of $1,650 for self-only plans or $3,300 for family coverage in 2025.
HSAs offer three main tax benefits: an upfront deduction for contributions, tax-free growth on investments and no taxes on withdrawals when used for qualified medical expenses. These accounts are triple-tax advantaged for medical expenses, providing significant benefits for those who contribute to them.
It is important to take advantage of the tax breaks and potential growth opportunities offered by HSAs. Despite the benefits of HSAs, only 19% of participants invest their balance while the majority leave their savings in cash according to a survey from the Plan Sponsor Council of America. However with proper management and planning HSA can be a powerful tool to save money on healthcare expenses and secure financial future.
:quality(70):focal(1755x1155:1765x1165)/cloudfront-us-east-1.images.arcpublishing.com/shawmedia/CCKDDTCSBRFXHA2ROJ2M3FCRSQ.jpg)
