Deciding how much to contribute to your Health Savings Account (HSA) can feel overwhelming. The right amount depends on your healthcare expenses, your financial goals, and the annual limits set by the IRS. The good news is that HSAs are flexible—you can adjust your contributions at any time and use the funds to cover qualified medical costs tax-free. This guide walks through 2025 and 2026 contribution limits, shows you how to decide on an amount, and provides real-world examples to help you plan.

If you’d like a refresher on how HSAs work, our HSA guide explains the basics — from eligibility to tax benefits.

2025 and 2026 HSA Contribution Limits

The IRS updates HSA contribution limits each year to account for inflation and rising healthcare costs. These limits apply to the combined amount that you and your employer contribute to your account. Contributing more than the annual maximum can trigger penalties, so it is important to stay within the limit.

For example, if your employer contributes $1,000 toward your family HSA in 2025, you could personally contribute up to $7,550 to stay within the $8,550 family limit.

The impact of these contributions can be significant. A single individual who contributes the maximum $4,300 in 2025 and falls in a 25 percent tax bracket would save about $1,075 in taxes. A family contributing the maximum $8,550 would save about $2,138 at the same tax rate.

For 2026, the IRS has set the limits at $4,400 for individuals and $8,750 for families.

Key takeaway: For 2025, the limits are $4,300 for individuals and $8,550 for families. In 2026, they rise modestly to $4,400 and $8,750. The more you contribute (within the limits), the more you save in taxes.

HSA Contributions by Paycheck or Month

Here’s what the IRS maximum HSA contributions look like broken down into per-paycheck and per-month amounts (assuming 26 paychecks per year):

*Tip: Subtract any employer contributions before dividing—this keeps you within the IRS limit.

Looking at contributions by paycheck or month helps you fit HSA savings into your regular budget, making it simpler to stay on track and reach your annual goal.

How to Decide on a Contribution Amount

One of the easiest ways to calculate your contribution is to divide your annual goal by the number of paychecks you receive. For example, if you want to save $3,000 across 24 paychecks, you would need to set aside about $125 per paycheck.

You also have two main ways to fund your HSA:

• Payroll deduction: If your employer offers payroll contributions, this option saves the most because the money comes out before taxes. You avoid both income and payroll taxes, including Social Security and Medicare.

• Direct contributions: If you contribute directly from your bank account, the money is still tax-deductible when you file, but you do not save on payroll taxes.

Example: If you contribute $4,000 through payroll and your payroll tax rate is 7.65 percent, you save an extra $306 compared to making the same contribution from your bank account.

You can adjust contributions at any time. People often change their contribution levels during open enrollment, after a major life change such as marriage or the birth of a child, or when their medical or financial circumstances shift.

Key takeaway: Start with a realistic number that fits your budget, then adjust as your needs and goals evolve.

What’s Your Savings Goal?

Your contribution strategy should reflect your personal goals. For some, the priority is lowering today’s healthcare costs. Others want to build a cushion for unexpected expenses, while some treat the HSA as a long-term investment vehicle.

Below are three approaches, each with examples.

Goal 1: Cover Today’s Healthcare Costs

If you expect to have medical expenses this year, consider contributing at least enough to cover them. Eligible costs include doctor visits, prescriptions, dental and vision care, mental health services, and chiropractic care. You can also use HSA funds for your spouse or dependents, even if they are not on your health plan.

Example: Covering annual medical costs in 2025

* Assumes 30% combined federal and state tax savings. Actual savings vary.

Without an HSA, you would need $2,857 in gross income to cover $2,000 in bills after taxes. By using an HSA, you only need to set aside $2,000. Over time, those tax savings add up.

Goal 2: Build Your Safety Net

High deductible health plans require you to pay out-of-pocket before insurance begins to cover costs. Saving enough to cover your deductible—and eventually your out-of-pocket maximum—can protect you from unexpected bills. Because HSA funds never expire, savings you set aside today will be available whenever you need them.

Example: Building a safety net in 2025

*Assumes 30% combined federal and state tax savings. Actual savings vary.

By contributing $2,000 annually and spending $1,000, the remaining $1,000 rolls over. After five years, you would have $5,000 saved in your account, along with more than $4,000 in tax savings.

Goal 3: Maximize Long-Term Growth

If your budget allows, maxing out your HSA each year gives you the full benefit of the account’s “triple tax advantage”: contributions are tax-free, growth is tax-free, and withdrawals for qualified expenses are tax-free.

This approach can be particularly powerful if you invest your HSA funds. After age 65, you can withdraw money for non-medical expenses without penalty (though the withdrawals are subject to income tax).

Example: Family max contribution in 2025 with investing

Example: Family max contribution in 2026 with investing

*Investments are not guaranteed, not insured, and may lose value. These examples assumes a 8% annual return with no withdrawals.

A family that consistently maxes out contributions and invests wisely could grow their HSA into a significant long-term asset for healthcare costs in retirement.

Comparing Savings Strategies

The right HSA contribution strategy depends on your health needs, budget, and long-term goals. While there’s no one-size-fits-all answer, most people fall into one of three approaches: covering immediate costs, building a financial cushion, or maximizing long-term savings.

• Cover today’s costs: If you expect frequent medical bills, contribute enough to pay for them through your HSA. Every doctor visit, prescription, or dental bill becomes tax-free, lowering your effective healthcare costs.

• Build a safety net: If you’re generally healthy but want to prepare for the unexpected, aim to fund your deductible—or even your out-of-pocket maximum. Because HSA dollars roll over, this approach creates a lasting cushion that reduces the risk of medical debt.

• Max out contributions: If your budget allows, contributing the annual maximum unlocks the full “triple tax advantage.” Investing your balance gives it the potential to compound over decades, building a healthcare nest egg for retirement.

Choosing among these strategies comes down to your current situation. If medical bills are part of your budget each year, start by covering those. If you can afford to think longer-term, building a cushion or maxing out will position you for greater savings and security.

How to Adjust Contributions

One of the biggest advantages of an HSA is flexibility — you’re not locked into a single contribution amount for the whole year. You can increase, decrease, or stop contributions at any point. Most providers let you make updates online or in a mobile app, and if you contribute through your employer, you can adjust amounts in your payroll system or by working directly with HR.

Here are common times when people review or change their contributions:

• During open enrollment: A natural time to reset your savings goals for the year.

• After a major life event: Marriage, the birth of a child, or a job change may affect your healthcare and financial needs.

• When income or expenses change: A raise, bonus, or new expense may make it easier (or harder) to save.

• At tax time: You can still contribute for the previous year up until the tax filing deadline if you haven’t hit the IRS limit.

Even small changes can make a difference. Increasing contributions by $50 a month adds $600 a year to your HSA — plus extra tax savings. A one-time $500 deposit at tax time can also lower your taxable income and boost your refund.

Key takeaway: Treat your HSA contributions as something you can fine-tune over time. Small adjustments in the right moments help you stay on track without putting pressure on your budget.

Key Rules to Remember

Managing an HSA isn’t just about how much you save — there are also a few IRS rules that can affect your contributions and withdrawals. These guidelines ensure you stay within legal limits and avoid penalties, while also taking advantage of special opportunities like catch-up contributions. Below are some of the most important rules to keep in mind:

• Catch-up contributions: If you are 55 or older, you can contribute an extra $1,000. For example, a 57-year-old with family coverage in 2025 could contribute $9,550.

• Last-month rule: If you are HSA-eligible on December 1, you can contribute the full annual limit. However, you must remain eligible through the following year to avoid penalties. For instance, if you join in November 2025, you can still contribute $4,300 (individual).

• Excess contributions: Contributions over the limit must be withdrawn before the tax deadline to avoid a 6 percent penalty. If you go $500 over, you must remove $500 plus any earnings.

• Transfers vs. rollovers: Transfers move funds directly between custodians with no limit. Rollovers require redepositing within 60 days and are limited to once per year.

• After age 65: Funds can be withdrawn for any purpose without penalty. Non-medical withdrawals are taxed like income, similar to traditional retirement accounts.

Understanding these rules makes it easier to manage your account year after year. With the basics covered, you can focus on using your HSA to save on taxes, cover healthcare costs, and build long-term security.

Making Your Contributions Work for You

Contributing to your HSA does not have to be complicated. Start by covering your expected healthcare costs, then build a safety net, and eventually aim to maximize contributions when your budget allows. Along the way, keep IRS rules in mind and review your contribution levels as your circumstances change. Every dollar you contribute provides immediate tax benefits and creates long-term financial security.

An HSA is more than just a savings account—it is a powerful tool that can help you manage today’s costs and prepare for tomorrow’s needs. If you already have an HSA, use these strategies to maximize its value. And if you’re ready to open your own, contact our team to guide you through the process of signing up.