What You Should Know About 2014 HSA Contribution Limits
UPDATE: To find out the 2019 HSA contribution limits, click here.
If you have an HSA, great news! Not only are you taking advantage of triple tax savings (contributions, interest earned and disbursements are tax-free), but you can also save even more as the IRS increased the contribution limit for 2014.
2014 HSA Contribution Limits:
- $3,300 if participating in the health plan as an individual
- $6,550 if participating in the health plan as a family
- $1,000 extra for age 55 or older (combined limit of $4,300 or $7,550)
These limits are up from 2013, when limits were $3,250 for individuals and $6,450 for families. The $1,000 “catch-up" for those ages 55 or older remains the same.
Don't think you need to contribute the maximum?
If you're able to, you may want to take into consideration these factors:
HSAs allow you to plan for the future. According to an estimate by Fidelity Investments , a 65-year-old couple retiring in 2013 will need at least $220,000 for medical expenses at retirement. HSAs maximize your savings as contributions are tax-free and accounts earn tax-free interest.
The more you contribute, the greater the tax-savings. For example, if an individual contributes $3,300 to their HSA for five years, assuming a federal tax bracket of 28%, a state tax of 5% and an interest rate of 3%, at the end of year 5 they'll have $17,520.15 in their HSA and will have saved a total of $5,955.10 in taxes.
Don't forget your out-of-pocket costs, including OTC. You probably know that you can plan for co-pays, co-insurance and deductibles expenses with an HSA. Don't forget to also include money for OTC items like first aid supplies, sunscreen, baby care products and more. You'll buy these items throughout the year regardless, so why not take advantage of buying them with pre-tax money? Remember, everything on FSAstore.com is HSA-eligible, too!
OTC medicines are eligible with a prescription, too! If you regularly use an OTC medicine such as allergy medicine, cold medicine, headache medicine, etc., you may want to consider asking your doctor to give you a prescription. If you have a prescription for OTC medicines, they're also allowed on your HSA.
Make the most of your HSA year-round with up to 40% savings at FSAstore.com. All FSAstore.com products are HSA eligible.