IRS boosts health savings account contribution limits for 2025

The
IRS
has
unveiled
the
2025
contribution
limits
for

health
savings
accounts,
which
are

triple-tax
advantaged
for
medical
expenses.

The
new

HSA
contribution
limit
for
2025
will
be
$4,300
for
self-only
health
coverage,
up
from

$4,150
in
2024,
based
on
inflation
adjustments,
the
IRS
announced
Thursday.

The
contribution
limit
will
also
increase
for
savers
with
family
coverage.
In
2025,
those
with
family
plans
can
deposit
up
to
$8,550
into
HSAs,
which
is
up
from
$8,300
in
2024.

The
IRS
will
release
the
2025
catch-up
contribution
for
savers
age
55
and
older
later
this
year.
It
currently
stands
at
$1,000
for
2024,
unchanged
from
2023.

More
from
Personal
Finance:

Just
4%
of
current
retirees
say
they
are ‘living
the
dream,’
survey
finds

This
is
the
best
time
for
a
Roth
individual
retirement
account
conversion

Writing
a
will
is
crucial:
It’s ‘not
just
a
question
about
finances,’
expert
says

You
must
have
an
eligible
high-deductible
health
insurance
plan
to
make

HSA
contributions.
The
IRS
defines “high-deductible”
as
at
least
$1,650
for
self-only
plans
or
$3,300
for
family
coverage
for
2025.

HSAs
offer
three
tax
benefits.
There’s
an
upfront
deduction
for
contributions,
investments
grow
tax-free
and
there
are
no
levies
for
withdrawals
used
for
qualified
medical
expenses.

However,
only
19%
of
HSA
participants

invest
their
balance,
meaning
the
vast
majority
forgo
growth
by
leaving
savings
in
cash,
according
to
a
2023
survey
from
the
Plan
Sponsor
Council
of
America.