HSA savings calculator
See how your savings can add up to help pay for medical needs now and in the future.
If you've decided to save in a health savings account (HSA), your next move is to figure out how much. That involves a bit of math, but don’t worry! We’ll help you think it through.
The good news is that an HSA helps you cover costs now plus accumulate funds to cover your expenses in the future. As you think about your savings strategy, think about an approach that balances both of these needs. Remember: It's always a good idea to focus on the “saving” versus “spending” aspect of your HSA; that way you’ll have a better chance of having what you need, when you need it.
|Think ahead to how much you may need to spend on health expenses this year.||Some expenses you may be able to predict. If you’ve been relatively healthy, you may expect little or no health care costs. But it’s always a good idea to plan for an emergency.|
|Put in at least the amount of your deductible.||If you think you could have health care expenses that are more than the deductible, you may want to put a bit more cash into your HSA. Bump it up a bit to whatever you can afford.|
|Once you determine the cash amount, invest the rest.||Consider this rule of thumb: Keep some in cash, and invest the rest. Once your balance reaches $1,000, you can start investing your HSA funds. And, any interest earned from investments in your account is tax-free. Investing the funds improves the chances that your account will grow over time. Model your HSA’s potential growth using our calculator here.|
|Revisit your cash versus investing approach in your HSA each year.||Review your spending to see how the previous year went, and make any necessary adjustments to your contribution amount and investment mix. And remember, you don’t lose what you don’t spend. Any money left over rolls over to next year, and potentially can keep growing.|
Remember: An HSA is a key part of a solid financial strategy for retirement, and the triple tax advantages may help you stretch your retirement savings dollar further. No matter what your stage in life now, ultimately you will need to pay for health care expenses in retirement. This is an area where people tend to underestimate. A quick reality check: Studies have shown that a couple retiring at age 65 may need upwards of $273,000 to cover out-of-pocket expenses while retired1. That means saving early, and often. Keep this number in your mind as an overall savings goal to shoot for as you manage your HSA, year after year.
Don’t worry if you don’t get it exactly right on your first try. Bottom line: Save. You can – and should – increase your contribution amount later when you have a better sense of your needs and a little more experience working with your HSA. And, you can increase the amount you’re contributing throughout the year (check with your employer for specific timing).
Want to learn more? Learn how to maximize your HSA here.
1Sources: Employee Benefits Research Institute, January 2017. A 65-year-old couple, both with median drug expenses would need $273,000 to have a 90% chance of having enough money to cover health care expenses (excluding long-term care) in retirement. Savings Needed for Medigap Premiums, Medicare Part B Premiums, Medicare Part D Premiums and Out-of-Pocket Drug Expenses for Retirement at age 65 in 2017.
Bank of America makes available The HSA for Life® Health Savings Account as a custodian only. The HSA for Life is intended to qualify as a Health Savings Account as set forth in Internal Revenue Code Section 223. However, the account beneficiary that establishes the HSA is solely responsible for ensuring that he/she satisfies the Health Savings Account eligibility requirements set forth in Section 223. If an individual/employee establishes a Health Savings Account and he/she is not otherwise eligible, he/she will be subject to adverse tax consequences. In addition, an employer who makes contributions to an HSA of an ineligible individual may also be subject to adverse tax consequences. We recommend that HSA applicants and/or employers contact qualified tax or legal counsel before establishing a Health Savings Account.
Bank of America does not sponsor or maintain the Flexible Spending Accounts or Health Reimbursement Arrangements that you establish. Those programs are sponsored and maintained solely by the employer. Bank of America is nothing more than a claims administrator who performs ministerial administrative tasks with respect to such arrangements pursuant to agreement with the employer. The employer is solely responsible for ensuring that such arrangements comply with all applicable laws.
The planning tools and information calculators are illustrative only, and accuracy is not guaranteed. They are intended to provide a comparative tool for various consumer health care options and potential costs and savings of those options. Bank of America and its affiliates are not tax or legal advisors. The calculators are not intended to offer any tax, legal or financial advice and do not assure the availability of or your eligibility for any specific product offered by Bank of America or its affiliates. Please consult with qualified professionals to discuss your situation. This site may contain links to third-party content, which may be articles, videos, or calculators, regarding health plans only as a convenience. Some articles, videos and calculators may have been written and produced by third parties not affiliated with Bank of America or any of its affiliates.
Neither Bank of America nor any of its affiliates provide legal, tax, accounting or benefits consulting advice. Please consult with your own attorney or tax advisor to understand the tax and legal consequences of your HSA, Health FSA and/or HRA plan or program offerings to your employees and your particular situation in your capacity as employer and/or plan administrator. This material should be regarded as general information on health care considerations and is not intended to provide specific health care advice.
If you have questions regarding your particular health care situation, please contact your health care, legal or tax advisor.
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Investing in securities involves risks, and there is always the potential of losing money when you invest in securities.
Mutual Fund investment offerings for the Bank of America HSA are made available by Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S”), a registered broker-dealer, Member SIPC and a wholly owned subsidiary of Bank of America Corporation (“BofA Corp.”). Investments in mutual funds are held in an omnibus account at MLPF&S in the name of Bank of America, N.A. (“BANA”), for the benefit of all HSA account owners. Recommendations as to HSA investment menu options are provided to BANA by the Chief Investment Office (“CIO”), Global Wealth & Investment Management (“GWIM”), a division of BofA Corp. The CIO, which provides investment strategies, due diligence, portfolio construction guidance and wealth management solutions for GWIM clients, is part of the Investment Solutions Group (ISG) of GWIM.
MLPF&S makes available certain investment products sponsored, managed, distributed or provided by companies that are affiliates of BofA Corp.
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