HSA tax savings calculator.
Your HSA tax savings.
Why HSAs are the best tax-advantaged account
An HSA is the only account in the US tax code with three tax breaks: deductible on the way in, tax-free growth, and tax-free withdrawals for qualified medical expenses. Compared to a 401(k) or traditional IRA (deductible in, taxed out), it's strictly better for any dollar you'll spend on healthcare in retirement — and after age 65 it functions like a traditional IRA for non-medical withdrawals (taxed but no penalty).
Eligibility
- You must be enrolled in a qualifying High-Deductible Health Plan (HDHP) — 2026 minimums: $1,700 deductible / $8,500 OOP max self-only; $3,400 / $17,000 family.
- You can't have other non-HDHP health coverage (including most FSAs).
- You can't be claimed as a dependent on someone else's tax return.
- You can't be enrolled in Medicare (which is why people often stop HSA contributions at 65).
2026 contribution limits
- Self-only HDHP: $4,400
- Family HDHP: $8,750
- Catch-up (age 55+): +$1,000
FICA savings: the underrated piece
If you contribute via employer payroll deduction (the "Cafeteria Plan" / Section 125 route), your HSA contribution is also exempt from the 7.65% FICA tax (6.2% Social Security + 1.45% Medicare). On a $4,400 contribution, that's $337/year on top of income-tax savings — significant. Direct contributions (you write a check from your bank to your HSA) do NOT get the FICA savings; they only get the income-tax deduction on your annual return.
Common questions.
Can I invest my HSA?
Yes, with most HSA providers once your balance exceeds a minimum (often $1,000-$2,500). Fidelity, Lively, and HealthEquity offer low-cost investment options. The triple tax advantage compounds: tax-free contribution + tax-free growth + tax-free withdrawal for medical = better than any other retirement account dollar-for-dollar.
What happens after age 65?
Two key changes. (1) You can no longer contribute (must enroll in Medicare). (2) Non-medical withdrawals are no longer penalized 20% — they're just taxed as ordinary income, exactly like a traditional IRA. Medical withdrawals stay tax-free forever, including for Medicare premiums.
Which states DON'T exempt HSA contributions from state tax?
California and New Jersey are the only states that do not conform to federal HSA rules — contributions are deductible federally but NOT on your state return. Alabama and Wisconsin formerly diverged but now conform. Check your state's specific HSA conformity if you're in CA or NJ.
Should I spend HSA money now or invest it?
If you can afford to pay current medical bills out of regular income, invest the HSA and let it compound. Save the medical receipts; you can reimburse yourself decades later from the HSA tax-free for any qualifying expense, as long as the expense was incurred after you opened the HSA. This is the "shoebox strategy" and is the single most powerful HSA move.