For 2013, you can contribute $3,250 if you have self-only coverage or $6,450 if your family is covered. And, if you’re 55 or older, you can contribute an additional $1,000.
Advantages of a health savings account:
One of the most important long-term reasons for having an HSA is to save money for medical expenses during retirement. An HSA is the best way to save money for medical expenses during retirement.
HSAs allow you to make withdrawals tax-free to pay for eligible medical expenses. You can make withdrawals before and after age 65.
Strategies to maximize your HSA:
Strategy 1: Make the maximum allowed contributions to your HSA at the beginning of each year. Even though you have until April 15 of the following year to make HSA deposits, you can take advantage of the tax-free growth in your account by funding it as soon as possible. Over decades, you could accumulate tens of thousands of additional dollars with this strategy alone.
Strategy 2: Delay withdrawing money from your HSA as long as possible. You have the option of paying for your medical expenses out of pocket and leaving your money in the HSA so it grows tax free. You may reimburse yourself from your HSA at any future time to pay for eligible medical expenses you incur today. Be sure to save your receipts.
Strategy 3: Place your HSA funds in mutual funds or other investments that offer growth potential.*
* Investing in mutual funds involves risk, including possible loss of capital.
Rate of return is shown for illustration only and does not represent the return of any specific investment. Your returns will vary.