By Boettcher Insurance Agency
October 15th is HSA Awareness Day!
Are you making the most of your Health Savings Account (HSA)? This special type of savings account not only helps you manage medical expenses but also offers significant tax benefits and growth potential that can enhance your financial future. Whether you’re new to HSAs or looking to maximize their benefits, we’re here to help you understand why they’re such a valuable tool.
What is a Health Savings Account?
A Health Savings Account (HSA) is a tax-advantaged savings account designed specifically for healthcare expenses. It allows you to set aside pre-tax dollars to pay for medical costs like deductibles, copayments, and eligible over-the-counter medications. Plus, the funds in your HSA can grow over time, making it a smart option for both short-term healthcare expenses and long-term financial planning.
Who Can Open an HSA?
To open an HSA, you must be enrolled in a High Deductible Health Plan (HDHP). You shouldn’t have any other health insurance, must not be enrolled in Medicare, and cannot be claimed as a dependent on someone else’s tax return.
Contribution Limits for 2025
For 2025, the IRS has set new contribution limits:
• $4,300 for individuals
• $8,550 for families
If you’re 55 or older, you can contribute an extra $1,000 as a catch-up contribution, allowing you to set aside more for your future healthcare needs.
HSA Benefits Beyond Medical Expenses
Did you know that after age 65, you can withdraw HSA funds for non-medical expenses without the 20% penalty (though you’ll still pay income tax on the withdrawal)? This flexibility makes HSAs a powerful tool for retirement planning, allowing you to cover healthcare expenses tax-free while also supplementing your retirement savings.
How Can HSAs Fit Into Your Financial Strategy?
HSAs aren’t just for covering immediate medical expenses. They’re a smart option for anyone looking to lower their tax burden while saving for future healthcare needs or retirement. Whether you’re contributing the maximum each year or just getting started, HSAs offer unmatched flexibility and benefits.
Ready to Learn More?
Download our comprehensive HSA Guide below to get all the details on how an HSA can benefit you and your family.