🏥 HSA Cheat Code

HSAs are the only account with THREE tax benefits: 1) Contributions are tax-deductible (like 401k). 2) Investments grow tax-free (like Roth IRA). 3) Withdrawals for medical expenses are tax-free. No other account in the US tax code offers all three.

For 2025: $4,300 for self-only HDHP coverage, $8,550 for family coverage. If you're 55+, add $1,000 catch-up. Your employer contributions count toward these limits.

Yes! After age 65, HSA withdrawals for non-medical expenses are taxed as ordinary income (like a 401k) — no penalty. For medical expenses, it's still completely tax-free. The optimal strategy: pay medical bills out-of-pocket now, invest your HSA, and let it compound for decades.

California and New Jersey do not recognize HSA tax benefits at the state level. In these states, you'll still get the federal deduction, but HSA contributions are taxed at the state level, and investment growth is also state-taxable.

HSAs are actually more tax-efficient than 401(k)s when used for medical expenses. 401(k): tax deduction in, taxed out. HSA: tax deduction in, tax-free out (for medical). The optimal order: 1) Max employer 401k match, 2) Max HSA, 3) Max 401k, 4) Max Roth IRA.

To qualify for an HSA, you need an HDHP. For 2025, that means a minimum deductible of $1,650 (self) or $3,300 (family), and max out-of-pocket of $8,300 (self) or $16,600 (family). Many employer plans qualify — check with HR.