Why the HSA Is the Best Tax Shelter in America
A Health Savings Account is the only triple-tax-advantaged account in the US tax code: contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are tax-free. No other account — not a 401(k), not a Roth IRA — offers all three. For 2026 you can contribute up to $4,400 (self-only) or $8,750 (family), plus a $1,000 catch-up at age 55+.
How to Use This Calculator
Enter your planned contribution, your HDHP coverage type, whether you're 55 or older, and whether you contribute through payroll. Add your income and filing status to set your marginal rate. The calculator shows income tax saved, FICA saved (payroll only), and the true net cost of funding your HSA.
The Payroll Bonus: Avoiding FICA
Contributing through your employer's payroll (a Section 125 cafeteria plan) is better than contributing directly, because payroll HSA dollars also escape the 7.65% FICA tax— a saving you can't get on a 401(k) or IRA. For someone in the 22% bracket, a payroll HSA contribution is effectively discounted by nearly 30% between income tax and FICA.
Worked example: A single filer earning $75,000 contributes $4,400 via payroll. Income tax saved = 22% × $4,400 = $968; FICA saved = 7.65% × $4,400 = $337. Total tax saved = $1,305, so the real cost of $4,400 in your HSA is about $3,095.
The HSA as a Stealth Retirement Account
Beyond medical bills, the HSA doubles as retirement savings. Invest the balance, pay current medical costs out of pocket, and let it compound — after age 65 you can withdraw for any purpose (taxed like a traditional IRA, but penalty-free), while medical withdrawals stay tax-free forever. Pair it with our Compound Interest Calculator and Federal Income Tax Calculator to see the long-game impact.