Americans will be able to set aside more money in health savings accounts than ever before as the IRS announced its largest increase in the maximum HSA contributions for 2024.
The maximum HSA contribution for 2024 will be $8,300 for a family and $4,150 for an individual. That is an increase from 2023’s maximums of $7,750 for a family and $3,850 for an individual.
HSA participants aged 55 and older can contribute an extra $1,000, which means an older married couple could set aside $10,300 a year, up from $9,750 for 2023.
HSA contribution limits are adjusted for inflation each year, and typically the bump is $100 to $200 a year if at all. But because of high inflation, the family maximum limit went up $450 for 2023 and another $550 for 2024.
Americans held $112.5 billion in about 37 million HSA accounts at the end of January, according to Devenir Research. Notably, Americans spend nearly $400 billion a year in posttax out-of-pocket healthcare expenses, according to HSA provider Alegeus.
HSAs are tax-advantaged individual savings accounts designed specifically to pay for the medical expenses of individuals who are enrolled in high-deductible health plans.
As long as HSA funds are used to pay for qualified medical expenses, account owners will not pay income tax on the amount withdrawn.
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