Health Savings Account (HSA) Savings Calculator
Health Savings Account (HSA) Savings Calculator Definitions
- Health Savings Account (HSA)
- An HSA is a tax-advantaged account established to pay for qualified medical expenses of an account holder who is covered under a high-deductible health plan. With money from this account, you pay for healthcare expenses until your deductible is met. Any unused funds are yours to retain in your HSA and accumulate towards your future healthcare expenses or your retirement.
In order to put money into an HSA you are required to have a High Deductible Health Plan (HDHP) in effect for either you or your family. A HDHP is simply health insurance that meets certain minimum deductible and maximum out-of-pocket expense requirements. **HSA_LIMITS_DEFINITION**
- High Deductible Health Plan (HDHP) deductible amount
- Your HDHP deductible amount is the amount you pay toward your own medical expenses, in a given year, before your insurance begins to cover any expenses. In 2018, for a HDHP, the minimum deductible amount is $1,350 for self-only coverage and $2,700 for family coverage.
- High Deductible Health Plan (HDHP) coverage type
- Choose the insurance coverage type for your HDHP. Your choices are 'Family' or 'Single'.
- Current Health Savings Account (HSA) balance
- The total amount currently saved in your HSA.
- Monthly Health Savings Account (HSA) contribution
- The amount you will contribute each month to your HSA. This calculator assumes that you make your contribution at the beginning of each month. Your monthly contributions are limited by the annual maximum allowed. For 2017, the maximum contribution to an HSA is $3,400 for self-only coverage and $6,750 for family coverage. This calculator doesn't take catch-up contributions into account when calculating your maximum annual contribution.
- Monthly healthcare expenses
- The amount per month you expect to spend on qualifying medical expenses.
- Years before retirement
- The number of years you will be able to save (contribute) into your HSA before you retire.
- Annual rate of return
- This is the annual rate of return you expect to receive on your HSA funds. The actual rate of return is largely dependent on the types of investments you select. The Standard & Poor's 500® (S&P 500®) for the 10 years ending December 31st 2017, had an annual compounded rate of return of 8.3%, including reinvestment of dividends. From January 1, 1970 to December 31st 2017, the average annual compounded rate of return for the S&P 500®, including reinvestment of dividends, was approximately 10.6% (source: www.standardandpoors.com). Since 1970, the highest 12-month return was 61% (June 1982 through June 1983). The lowest 12-month return was -43% (March 2008 to March 2009). Savings accounts at a financial institution may pay as little as 0.25% or less but carry significantly lower risk of loss of principal balances.
It is important to remember that these scenarios are hypothetical and that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are generally subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment. It is not possible to invest directly in an index and the compounded rate of return noted above does not reflect sales charges and other fees that investment funds and/or investment companies may charge.
- Expected inflation rate
- This is what you expect for the average long-term inflation rate. A common measure of inflation in the U.S. is the Consumer Price Index (CPI). From 1925 through 2017 the CPI has a long-term average of 2.9% annually. Over the last 40 years highest CPI recorded was 13.5% in 1980. For 2017, the last full year available, the CPI was 2.0% annually as reported by the Minneapolis Federal Reserve.
- Marginal income tax rate
- Your marginal tax rate is used to calculate your potential tax savings. We assume that all contributions receive a tax deduction at the tax rate you enter here. **TAXTABLE_CURRENT_DEFINITION**