A Health Savings Account is tax-free three ways: contributions lower your taxable income, the money grows tax-free, and withdrawals for medical costs aren't taxed. You need a high-deductible health plan to contribute.
Here are the 2026 limits and what an HSA saves on a typical salary.
2026 HSA rules
| Self-only | Family | |
|---|---|---|
| Contribution limit | $4,400 | $8,750 |
| Catch-up at 55 or older | +$1,000 | +$1,000 |
| Plan's minimum deductible | $1,700 | $3,400 |
| Plan's out-of-pocket maximum | $8,500 | $17,000 |
Worked example
Example: Single, $85,000, Texas, $3,900 through payroll
Federal income tax falls by $858, and payroll contributions also skip $298 of Social Security and Medicare.
Saving: $1,156, so the $3,900 costs you $2,744.
With $500 a year from the employer, invested at 6% for 25 years, the HSA could reach about $256,000.
In California and New Jersey the state still taxes contributions. Pair an HSA with your 401(k) for the biggest tax savings.
How to use this calculator
- Choose self-only or family coverage, and tick if you're 55 or older.
- Enter your employer's and your own contributions.
- Enter your salary, filing status and state.
- Set the years and return for the growth projection.
FAQs
What are the 2026 HSA limits?
$4,400 for self-only coverage and $8,750 for family coverage, plus $1,000 if you're 55 or older.
Who can open an HSA?
Anyone covered by a high-deductible health plan (minimum deductible $1,700 self-only or $3,400 family in 2026) with no other disqualifying coverage, who isn't on Medicare.
What happens to my HSA at 65?
You can still use it tax-free for medical costs. For anything else, withdrawals are taxed as income but without the 20% penalty.
Should I invest my HSA?
If you can pay current medical bills from savings, investing the HSA for the long term gives the biggest tax-free growth.
Sources
- Kiplinger: 2026 HSA contribution limits
- Thomson Reuters: IRS announces 2026 HSA limits and HDHP minimums
Results are estimates and aren't tax, legal or financial advice. For your own return, check with a CPA or enrolled agent. Spotted a mistake? Tell us.