How Much You Should Save
& Tax Advantages
Top 10 Tips
- 1. Know your health insurance coverage. Every health plan will have out-of-pocket costs in the form of deductibles, copays, and coinsurance, and each plan will have a maximum contribution limit to keep in mind.
- 2. Use your premium savings. If you chose an HSA eligible health plan that offers lower premiums – consider putting some, or all, of those savings into your HSA.
- 3. Know your account. Ask these important questions:
• What is your contribution limit?
• Is your employer contributing to the account?
• Can you take the account with you if you leave the company?
• Do unused dollars at the end of the year roll over, or do you lose them?
- 4. Consider your budget and financial goals. Ensure your contributions fit into your overall personal finances.
- 5. Think about your typical health care utilization. Ask yourself how many office visits, prescriptions, specialists, labs, and other procedures you're likely to need.
- 6. Factor in major purchases. Look up average costs for any major planned treatments or procedures.
- 7. Look back at prior years. Your prior year spending may give you a hint as to how much you are likely to spend this year.
- 8. Think about the future. Think beyond the plan year – health care will continue to be a significant expense, even in retirement. It's never too early to save for the future.
- 9. Build in a buffer. Life happens – build in contingency funds for the unexpected.
- 10. Familiarize yourself with eligible expenses. Don't leave money on the table because you didn't realize certain expenses were eligible.
Learn More About How Much to Save
- Watch this video to help you determine how much you should be saving for health care
- Check out infographics to help you figure out how much to contribute to your FSA or HSA
- Read a short article about saving money for health care expenses
- Use calculators to help you estimate your health care spending next year and savings potential for the future
Options, especially when using acronyms, can sometimes be confusing. A Health Savings Account (HSA) lets you use pre-tax dollars to pay for eligible health care expenses for you, your spouse, or eligible dependents. Here are some things you should know:
|Who can contribute – you or your employer?||Either|
|Who owns the money – you or your employer?||You|
|Can you carry over unused funds from year to year?||
|Can you keep the funds if you leave the company?||
|Can you invest the funds for growth (like a 401k)?||
|Can you change your election at any time during the year?||
Test Your Knowledge
- How well-versed are you on tax-advantaged benefit accounts? Let’s find out. Take the Quiz
Learn More About Tax-Advantaged Accounts
- Check out this video to see how a Health Savings Account can help you manage health care expenses.
- Watch this video to learn how a Flexible Spending Account can help you.
- Read this article to see how tax-advantaged accounts can help you.