Maskot | Maskot | Getty Photographs
The IRS on Thursday unveiled 2026 contribution limits for health savings accounts, or HSAs, which provide triple-tax benefits for medical bills.
Beginning in 2026, the brand new HSA contribution limit shall be $4,400 for self-only well being protection, the IRS introduced Thursday. That is up from $4,300 in 2025, based mostly on inflation changes.
In the meantime, the brand new restrict for savers with household protection will leap to $8,750, up from $8,550 in 2025, in response to the replace.
Extra from Private Finance:
There’s a new ‘super funding’ limit for some 401(k) savers in 2025
This 401(k) feature can kick-start tax-free retirement savings
Gold ETF investors may be surprised by their tax bill on profits
To make HSA contributions in 2026, you need to have an eligible high-deductible medical insurance plan.
For 2026, the IRS defines a excessive deductible as at the least $1,700 for self-only protection or $3,400 for household plans. Plus, the plan’s cap on yearly out-of-pocket bills — deductibles, co-payments and different quantities — cannot exceed $8,500 for particular person plans or $17,000 for household protection.
Buyers have till the tax deadline to make HSA contributions for the earlier yr. Meaning the final probability for 2026 deposits is April 2027.
HSAs have triple-tax advantages
For those who’re eligible to make HSA contributions, monetary advisors advocate investing the steadiness for the long-term slightly than spending the funds on current-year medical bills, money movement allowing.
The rationale: “Your well being financial savings account has three tax advantages,” stated licensed monetary planner Dan Galli, proprietor of Daniel J. Galli & Associates in Norwell, Massachusetts.
There’s usually an upfront deduction for contributions, your steadiness grows tax-free and you may withdraw the cash any time tax-free for certified medical bills.
Not like flexible spending accounts, or FSAs, buyers can roll HSA balances over from yr to yr. The account can also be transportable between jobs, that means you possibly can preserve the cash when leaving an employer.
That makes your HSA “very highly effective” for future retirement financial savings, Galli stated.
Healthcare bills in retirement might be important. A single 65-year-old retiring in 2024 may count on to spend an average of $165,000 on medical bills by way of their golden years, in response to Constancy knowledge. This does not embrace the price of long-term care.
Most HSAs used for present bills
In 2024, two-thirds of corporations offered investment options for HSA contributions, in response to a survey launched in November by the Plan Sponsor Council of America, which polled greater than 500 employers in the summertime of 2024.
However solely 18% of members had been investing their HSA steadiness, down barely from the earlier yr, the survey discovered.
“Finally, most members nonetheless are utilizing that HSA for present health-care bills,” Hattie Greenan, director of analysis and communications for the Plan Sponsor Council of America, previously told CNBC.
