A health savings account (HSA) is a tax-advantaged account for people covered by a qualifying high-deductible health plan: contributions are deductible, growth is untaxed, and withdrawals for medical costs are tax-free.
For 2026 you can contribute up to $4,400 with self-only coverage or $8,750 with family coverage, plus $1,000 more if you are 55 or older. You must be covered by a high-deductible health plan and not enrolled in Medicare.
Unlike a flexible spending account, the balance carries over every year and can be invested. Many planners treat an HSA as a retirement account: pay current medical bills from cash, keep the receipts, and let the HSA grow, since you can reimburse yourself later for qualified expenses incurred after the account was opened.
Withdrawals for anything other than medical costs are taxed as income and, before 65, carry an extra 20% tax. From 65 the extra tax no longer applies, so non-medical withdrawals are taxed like a traditional IRA.
How to check
Check whether your HSA provider lets you invest the balance and what it charges; many hold the money in low-interest cash by default.
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