Contributing money to a health savings account, or HSA, is one of the smartest moves you can make for your retirement. Even though an HSA isn't a retirement plan in the same sense as an IRA or 401(k), it can be an extremely useful long-term savings tool.
But if you're going to maintain an HSA, it's important to manage that account wisely. Whether you're participating in an HSA for the first time in 2022 or not, here are three big mistakes to avoid.
1. Not knowing that contribution limits went up
Just as IRA and 401(k) plan limits can change from one year to the next, so too can HSA limits increase. This year, contribution limits are slightly higher than they were last year. If your goal is to max out your HSA, you'll need to pay attention to the new limits, which are as follows:
$3,650 if you're saving as an individual and are under 55
$4,650 if you're saving as an individual and are over 55
$7,300 if you're saving as a family and are under 55
$8,300 if you're saving as a family and are over 55
Keep in mind that any employer contributions you get toward your HSA count against these limits. This is different from 401(k) plans, where employer matching dollars aren't counted against savers' annual contribution limits.