Health Savings Account (HSA)
A triple-tax-advantaged savings account paired with a high-deductible health plan: pre-tax contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses.
Detailed Explanation
HSA contribution limits for 2025 are $4,300 (self-only) and $8,550 (family), with an additional $1,000 catch-up at age 55+. Eligibility requires enrollment in a qualifying high-deductible health plan with no other disqualifying coverage (general-purpose FSA, Medicare, etc.). HSAs are uniquely triple-tax-advantaged: deductible going in, tax-free growth, and tax-free out for qualified medical. After age 65, non-medical withdrawals are taxed as ordinary income (like a traditional IRA) without penalty. Investment growth makes the HSA the most tax-efficient retirement vehicle for those who can fund it without immediate medical need.
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Learn about Tax Planning & StrategyRelated Terms
Adjusted Gross Income (AGI)
Adjusted Gross Income is your total gross income reduced by specific above-the-line deductions, used as the starting point for calculating your federal taxable income.
Standard Deduction
A fixed dollar amount that reduces taxable income, available to taxpayers who do not itemize deductions on Schedule A.
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