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Strategies for Contributing to Your HSA

This page gives you some strategies for planning your HSA contributions and maximizing your savings.

Set up payroll deductions with your employer

The easiest way to contribute to your HSA is through your employer’s pre-tax payroll deduction program. 

Contributing even $100 a month to your HSA can quickly build a nest egg for health care needs that will help bridge the gap between the contributions your employer may make to your account and your deductible level. Plus, you get a triple tax benefit:

  • Taxable income reduction - HSA contributions are made before taxes, resulting in a lower taxable income.
  • Tax-free earnings - Interest growth earned on HSA funds is never taxed.
  • Tax-free distributions - HSA funds are not taxed when used for eligible expenses. 

Contribute savings from HDHP premiums 

Your HSA-qualified health plan is a high-deductible health plan (HDHP). Most HDHPs have lower monthly premiums than traditional health plans. Consider contributing the money you save by having a lower premium to your HSA. 

Make the maximum HSA contribution at the beginning of the year 

While you have until April 15 of the following year to make HSA deposits, contributing the maximum dollar amount to your HSA at the beginning of each year allows you to take full advantage of the tax-free growth in your account by letting the funds earn interest for the entire year.  The extra interest you earn by contributing to your account on January 1 of each year could be significant over 20 years or more.  Family coverage allows you to grow your account even more since you can contribute $6,900 in 2018. The limit for 2019: $7,000. 

Catch-up contributions

If you're over 55, you can make catch-up contributions of $1000 a year on top of the IRS's annual limit of $3,450 in 2018. The limit for 2019: $3,500.

See Catch-up contributions to learn more.

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