HEALTH AND TAX

HSA Calculator

A health savings account (HSA) is the only account with a triple tax advantage: money goes in tax-free, grows tax-free and comes out tax-free when you spend it on medical costs. This calculator projects how your HSA could grow over time and estimates how much tax those contributions could save you.

How to use this HSA calculator

1. Enter your current HSA balance. Your HSA provider’s app or your latest statement shows it.
2. Enter the annual contribution, yours plus anything your employer adds. You set your share in your payroll or benefits portal. For 2025 the IRS limit is $4,300 for self-only coverage and $8,550 for family coverage.
3. Enter the number of years you plan to let the account grow.
4. Enter the expected annual investment return. The fund pages on your provider’s website show past returns. Past performance is no guarantee of future returns, so a modest figure is the safer planning choice.
5. Enter your marginal income tax rate, which is the rate charged on the last dollar you earned. You can work it out from the brackets on your last tax return.
6. Press Calculate. You will see the projected HSA balance, your total contributions, the investment growth, and the estimated tax saved on contributions.

A worked example

Say you have $5,000 in your HSA now, you contribute $4,300 a year, which is the 2025 limit for self-only coverage, and you leave the account invested for 20 years at an average return of 6% a year. Your marginal tax rate is 22%.

Over the 20 years you pay in $86,000 of contributions. With growth added along the way, the projected balance reaches $174,213.72, of which $83,213.72 is investment growth on top of your starting balance and your contributions.

Those contributions could also save you about $18,920.00 in income tax over the 20 years, because every dollar went in before tax. Keep paying small medical bills out of pocket and that balance can keep growing for retirement, when medical costs usually rise. The Internal Revenue Service sets the yearly HSA contribution limits and eligibility rules.

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How this HSA calculator works

An HSA gives you a tax break at three separate points, which no other account does. You pay no tax on the money you put in, you pay no tax on the growth while it stays invested, and you pay no tax when you take money out to pay for qualifying medical care.

To open and contribute to an HSA, you must be covered by a high-deductible health plan. Unlike a flexible spending account (FSA), an HSA has no use-it-or-lose-it deadline: your balance rolls over from year to year, and the account belongs to you, so it moves with you when you change jobs or retire.

Because the money can stay invested for decades, many people pay small medical bills out of pocket, keep their receipts, and leave their HSA invested for retirement. This calculator follows that idea: it grows your balance at the return you enter, adds your annual contribution each year, and estimates the income tax saved by multiplying your total contributions by your marginal tax rate.

Practical tips

• Contribute through payroll if you can, because contributions taken from your pay also skip Social Security and Medicare tax, on top of income tax.
• Invest the balance above a small cash buffer, rather than leaving the whole account in cash, so your money has a chance to grow over the long term.
• Save your medical receipts. There is no deadline for reimbursing yourself, so you can pay yourself back tax-free years later for care you paid for out of pocket.
• Know the 2025 limits: you can contribute up to $4,300 for self-only coverage and $8,550 for family coverage, plus an extra $1,000 catch-up contribution if you are 55 or older.

Frequently asked questions

What is an HSA?

A health savings account (HSA) is a tax-advantaged savings account for medical costs, available with a high-deductible health plan. Money in the account can be spent tax-free on qualifying medical care.

Who can open an HSA?

You can open an HSA if you are covered by a qualifying high-deductible health plan and you have no other disqualifying coverage.

What are the HSA contribution limits for 2025?

For 2025, the limit is $4,300 for self-only coverage and $8,550 for family coverage. If you are 55 or older, you can add a $1,000 catch-up contribution.

What happens to my HSA at 65?

At 65, you can keep using your HSA tax-free for medical costs, just as before. If you spend it on non-medical costs instead, the money is taxed like a traditional IRA, but with no penalty after 65.