What Is a Health Savings Account (HSA)?

A Health Savings Account (HSA) is one of the most tax-efficient accounts available — contributions are pre-tax, growth is tax-free, and withdrawals for qualified medical expenses are tax-free. To contribute, you must be enrolled in a qualifying high-deductible health plan (HDHP). For 2024, the contribution limit is $4,150 for individuals and $8,300 for families. Unlike a Flexible Spending Account (FSA), HSA funds roll over year to year and can be invested. After age 65, you can use HSA funds for any purpose (subject to ordinary income tax, like an IRA).