HSA Calculator — Tax Savings & Growth
Calculate HSA tax savings, investment growth, and retirement health care funding. The triple tax advantage explained.
The Triple Tax Advantage
The HSA is the most tax-advantaged account in the US tax code. Tax-deductible contributions (reduce your taxable income). Tax-free growth (investments grow without capital gains tax). Tax-free withdrawals (for qualified medical expenses at any age, or any purpose after 65). No other account offers all three benefits. A 401k is tax-deferred (taxed on withdrawal). A Roth IRA is tax-free on withdrawal but not deductible. The HSA is both.
HSA as a Stealth Retirement Account
The optimal HSA strategy: contribute the max, invest 100%, and pay medical expenses out of pocket. Let the HSA grow tax-free for decades. After age 65, withdraw for any purpose (taxed as income, like a 401k) or for medical expenses (tax-free). At 8% annual returns, $4,150/year for 25 years grows to approximately $320,000 — all tax-free for medical expenses in retirement.
Contributing to your HSA through payroll deduction saves an additional 7.65% in FICA taxes compared to making direct contributions. On a $4,150 contribution, payroll deduction saves $317 in FICA that a direct contribution does not. Always contribute through payroll if your employer offers it.
