HSA Tax Savings Calculator

The Triple Tax Advantage of an HSA

A Health Savings Account (HSA) is the only account in the U.S. tax code that offers a triple tax benefit: contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are tax-free. No other account -- not a 401(k), not a Roth IRA -- offers all three.

Tax Benefit #1: Pre-Tax Contributions

HSA contributions reduce your taxable income for federal, state (in most states), and FICA taxes. If you contribute through payroll, you skip FICA entirely. If you contribute directly, you deduct the amount on your tax return (though you still pay FICA). This calculator assumes payroll contributions for the full FICA savings.

Tax Benefit #2: Tax-Free Growth

Once funded, HSA money can be invested in stocks, bonds, and mutual funds. All gains, dividends, and interest grow completely tax-free -- no annual capital gains taxes, no dividend taxes. Over 20-30 years, this compounding creates significant wealth.

Tax Benefit #3: Tax-Free Withdrawals

When you use HSA funds for qualified medical expenses (prescriptions, doctor visits, dental, vision, and more), the withdrawal is 100% tax-free. After age 65, you can withdraw for any purpose and pay only income tax (similar to a traditional IRA), making it a powerful retirement account.

The Stealth Retirement Strategy

The optimal HSA strategy for those who can afford it: contribute the maximum, invest it all, pay current medical expenses out of pocket, save your receipts, and let the HSA grow for decades. You can reimburse yourself for those old medical receipts at any point in the future, tax-free, with no time limit. This effectively turns your HSA into a super Roth IRA.

2024 Contribution Limits

• Self-only coverage: $4,150
• Family coverage: $8,300
• Age 55+ catch-up contribution: additional $1,000