HSA savings calculator
See how your savings can add up to help pay for medical needs now and in the future.
An HSA can help you save for health care costs in the current year or anytime in the future. Try to think ahead to how much you may need this year, plus what you can afford to set aside for longer-term needs. Let’s take a look at some considerations that can help you calculate a contribution strategy to fit your needs.
If you’re able, consider contributing the maximum allowed by the IRS. The more you can contribute, the more you can benefit from the HSA’s triple tax advantages1 to help build your balance for the future. Keep in mind: You don’t lose any unspent funds at the end of the year. All remaining funds roll over to the next year and can potentially keep growing.
If your employer offers both a traditional health plan and a high-deductible health plan (HDHP), one approach might be to save the difference in premiums. For example, let’s say the monthly premium for the traditional plan is $450 and $200 for the HDHP. Consider opting for the HDHP plan so that you can set aside the $250 difference each month in your HSA – and in a year’s time, you’ll have contributed $3,000.
You'll be responsible for meeting your out-of pocket deductible expenses, so consider contributing at least the amount of your deductible. If you think you could have health care expenses beyond your deductible, try to bump up your contribution to include that amount if you can.
Try our HSA calculator using your own numbers to see the impact to your account over time.
Planning with your HSA today can help you be prepared for your health care needs tomorrow. Here are some additional considerations to help you strategize how to use your HSA over the long term.
Keep some in cash, invest the rest. Once your balance reaches a $1,000, you can start investing the money in your account, giving you the potential to grow your balance over time. Any interest earned from these investments is tax-free. Remember to revisit your cash-versus-investment approach each year. You can always make adjustments to your contributions and investment mix to meet your needs.
Hypothetical results are for illustrative purposes only and are not meant to represent the past or future performance of any specific investment vehicle or account. If you make pre- tax contributions to an HSA, taxes are due upon withdrawal if assets are not used for qualified medical expenses. For amounts invested in mutual funds: Investment return and principal value will fluctuate and when redeemed may be worth more or less than their original cost.
Be realistic about what you will need in retirement. Here’s a quick reality check: Studies have shown that a couple retiring at age 65 may need $301,0002 to cover out-of-pocket medical expenses during retirement. The good news is that you can use your HSA’s triple tax advantages to help you stretch your retirement savings further. Keep this number in mind as an overall savings goal as you manage your HSA each year. Using our HSA calculator can help you see if you’re on track.
Keep going, keep saving. Life happens, needs change, goals evolve. But you can be prepared by continuing to contribute to your HSA – and even increase your contribution amount to help you build your balance for down the road, whenever you may need it. And, by saving the money you put in your account, you can make the most of your HSA’s triple tax advantages1 and the potential to grow your savings year after year.
Learn more about how to get the most from your HSA.
1 About Triple Tax Advantages: You can receive tax-free distributions from your HSA to pay or be reimbursed for qualified medical expenses you incur after you establish the HSA. If you receive distributions for other reasons, the amount you withdraw will be subject to income tax and may be subject to an additional 20% tax. Any interest or earnings on the assets in the account are tax-free. You may be able to claim a tax deduction for contributions you, or someone other than your employer, make to your HSA. We recommend you contact qualified tax or legal counsel before establishing an HSA.
2 Sources: Employee Benefits Research Institute, Issue Brief, no. 481, May 16, 2019. A 65-year-old couple, both with median drug expenses needs $301,000 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 2019.
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.
All trademarks and service marks belong to Bank of America Corporation unless otherwise noted.
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.
© Bank of America Corporation. All rights reserved. 2907570 Exp-01/21/2021(global footer) 3099716 06/03/2021 ARPKNVDH Exp - 09/24/2020(Cobranding)