How your HSA savings add up over time
As with any form of saving or investing, consistency over time can lead to significant growth in your HSA. One of the biggest advantages? HSA funds never expire—they’re yours to keep, year after year.
An HSA offers three key tax benefits:
- Contributions are tax-deductible (or pre-tax through payroll)
- Earnings grow tax-free
- Withdrawals for qualified medical expenses are also tax-free
That means unused funds in your HSA can become a powerful tool for building long-term savings, covering future healthcare expenses, creating an emergency fund, and even preparing for retirement.
How your HSA savings can grow
Whether you spend from your HSA or let funds sit and grow, you benefit from tax savings:
- Federal tax break: ~25% (depending on your bracket)
- State tax break: ~5% (in most states)
- Payroll tax break (FICA/FUTA): 7.65% when contributing via employer payroll
In total, that’s about 37.65% in tax savings. For every $1,000 you contribute, you could be saving around $376.50 in taxes.*
Want to see your personal savings? Use our HSA Tax Savings Calculator.
Example: Saving and growing your HSA
Let’s say you contribute $5,000 to your HSA in a year and spend $4,000 on qualified expenses. That leaves $1,000 in your account.
If you let that $1,000 grow in your HSA—without touching it—and earn an estimated 6% annually, after 10 years, it could grow to $1,790.85. Do this every year, and your growth could be even more significant.
Use our HSA Future Value Calculator to run your own numbers.
5 smart tips to maximize HSA savings and growth
1. Know what’s eligible
Many everyday health products qualify. Check the HSA Store Eligibility List to see which items you already use may be covered—and discover new ways to save.
2. Fund enough to cover your yearly expenses
Estimate your upcoming healthcare costs and contribute at least that amount to your HSA. Whether you pay directly from your HSA or reimburse yourself later, you’ll still get tax savings. Think of it as getting over 30% off* health items you already buy.
3. Delay reimbursement and let funds grow
Pay out of pocket when you can, and save your receipts. You can reimburse yourself later—years later if needed—as long as you keep records. This lets your HSA funds grow tax-free while remaining accessible. (Our Expense Dashboard makes this easy.)
4. Invest your HSA funds
Don’t just let your HSA sit in a low-interest account. If your provider offers it, investing your HSA can increase your long-term growth potential. Be sure to check your investment options and thresholds with your HSA provider.
5. Use discounts to stretch your funds
Smart shopping means more leftover dollars to invest or save. Look for deals in our Savings Center, and earn Perks Points with every purchase through our loyalty program.
Summary: Small steps, big savings
Your HSA is more than just a spending tool—it’s a way to grow tax-free savings for healthcare and beyond.
- Contribute consistently
- Use funds strategically
- Delay reimbursements when possible
- Invest for long-term growth
Start small. Stay consistent. Your HSA has the potential to support your health and your future.
Disclaimers
*Estimated savings based on average federal, state, and payroll tax rates. Individual tax situations may vary. Examples are for illustrative purposes only.
