On May 20, 2020, the IRS announced new contribution limits for health savings accounts (HSAs) for the upcoming year, 2021. HSA contribution limits are updated annually in order to adequately reflect cost-of-living adjustments across the country.
For the 2021 calendar year, HSA contribution limits will be $3,600 for individuals with self-only coverage under a high deducible health plan (HDHP), and $7,200 for family coverage under an HDHP ($50 and $100 increases, respectively, from 2020).
Those aged 55 or older also have the benefit of making a $1,000 “catch-up” contribution in 2021 (the same amount allotted in 2020).
Note: the minimum deductible for a qualifying high-deductible health plan in 2021 will remain at $1,400 for self-only coverage and $2,800 for family coverage.
What does this mean for me?
An increase in contribution limits means you can now sock away even more money, tax-free, for your health and longterm financial wellbeing.
Contributions are always tax-deductible, grow tax-free, and can be withdrawn without incurring taxes (as long as they’re used for HSA-eligible health expenses).
To learn more about the triple-tax-advantage of your HSA, read on here.
And for more information about contributions—who can contribute, when they should do it, and how much is enough—give this a read.