Late last week, the IRS announced the new contribution limits which will apply to Health Savings Accounts (HSAs) starting in January of 2023. These limits are the maximum amount an eligible individual can contribute to an HSA.
What is an HSA
HSAs are savings accounts owned by individuals that are designed to accumulate funds for the purpose of paying health expenses. If you want to hear about all the benefits of HSAs you should check out our previous article which breaks them down in detail!
Why the increase?
As you’ve probably heard, inflation is raging in America, and really, all around the world. Because of this, the IRS formula which calculates HSA contribution limits factored in a significant increase. So this is one of those famous “LOSE/WIN” situations that often exist in life.
The new limits
If you’re single, you’ll enjoy a new limit of $3,850, up from $3,650 in 2022.
For those of us with a spouse on a family plan, you’ll have the opportunity to enjoy a $7,750 limit, increased from $7,300 in 2022.
Should you increase your contributions to meet these new limits? If you’re able to, absolutely! HSAs are a valuable retirement tool and the only account that is triple-tax advantaged. Start planning for 2023, today!
