HSA Calculator

An HSA isn't just a place to park money for co-pays — it's the only account in the U.S. tax code that gives you a deduction when the money goes in, tax-free growth while it sits there, and a tax-free withdrawal when it comes out, provided you spend it on qualified medical expenses. This calculator runs that growth forward year by year using Balance = (Balance + Your Contribution + Employer Contribution) × (1 + Expected Return), and separately estimates the income-tax savings your own contributions produce.

The Triple Tax Advantage, Precisely

Most "tax-advantaged" accounts give you one or two of these benefits, not three. Contributions made through payroll are excluded from your taxable income (advantage one). Any interest, dividends, or capital gains inside the account are never taxed as they accrue (advantage two). And withdrawals used for IRS-qualified medical expenses — doctor visits, prescriptions, dental and vision care, and more — are never taxed either (advantage three). A Traditional 401(k) gives you the first two but taxes withdrawals; a Roth IRA gives you the second and third but not the first. The HSA is the only one that stacks all three.

There's a fourth, smaller advantage that's easy to miss: contributions made directly through payroll deduction are typically also exempt from FICA tax (Social Security and Medicare, 7.65% combined), which is not true of most other pre-tax retirement contributions, including a traditional 401(k). This calculator's "Annual Tax Savings" figure only accounts for income-tax savings on your own contribution; the FICA exemption is a genuine extra benefit on top of that number if your contributions run through payroll.

HSA vs. FSA: They Are Not the Same Account

Both let you pay for medical costs with pre-tax dollars, and that similarity leads a lot of people to treat them as interchangeable. They aren't. A Flexible Spending Account (FSA) is tied to your employer and, in most plans, is use-it-or-lose-it: money left unspent at the end of the plan year is forfeited, aside from a small carryover or short grace period some employers choose to offer. An HSA has no such deadline — every dollar you don't spend this year rolls over indefinitely and stays invested, and the account itself is portable if you change jobs or health plans. An FSA also requires no high-deductible health plan, while an HSA is only available if you're enrolled in one.

A Worked Example

Starting from a $2,000 balance, contributing $3,000 a year yourself plus a $500 annual employer contribution, at a 7% expected annual return over 20 years, with a 24% marginal tax rate, the year-by-year loop above produces:

Notice that investment growth ($89,267.49) actually exceeds total contributions ($70,000) over this 20-year stretch — a reminder that letting an HSA sit invested rather than draining it for every small medical bill can be more valuable long-term than the immediate tax deduction itself.

After Age 65: The HSA Becomes IRA-Like

Before 65, a non-medical HSA withdrawal costs you ordinary income tax plus a 20% penalty. Once you turn 65, that penalty disappears entirely — you can withdraw HSA funds for any reason, and the withdrawal is simply taxed as ordinary income, exactly like a distribution from a Traditional IRA or 401(k). Withdrawals for qualified medical expenses remain completely tax-free at any age, penalty or no penalty. In practice, this means an HSA you don't fully spend during your working years doesn't become "stuck" money at 65 — it effectively converts into a second Traditional IRA, while keeping the option to pull money out tax-free for medical costs, including many Medicare premiums, on top of that.

2026 Contribution Limits — Check Before You Rely on These

For 2026, the IRS-set HSA contribution limits are $4,400 for self-only coverage and $8,750 for family coverage, plus an additional $1,000 catch-up contribution if you're 55 or older. These figures include both your own and your employer's contributions combined. The IRS adjusts these limits most years, so treat the numbers above as informational context rather than a permanent rule, and confirm the current-year limits at IRS.gov (or with your HSA administrator) before finalizing how much to contribute.

If you're weighing an HSA against other retirement-adjacent accounts, the IRA Calculator compares Traditional, Roth, and taxable growth side by side, and the 401(k) Calculator models employer-match and rising-salary mechanics that this tool doesn't touch. Many people end up using all three: an HSA for its unmatched medical-expense tax treatment, and a 401(k) or IRA for general retirement income.