HSA Triple-Tax Lifetime Value Calculator
Example: Annual HSA contribution: 4300 $ · Federal marginal tax rate: 22 % · State income tax rate: 5 % · Years to let HSA grow: 25 · Expected annual investment return: 7 % · Annual qualified medical withdrawals: 500 $
| HSA advantage over taxable account | $122,757 |
| Projected HSA balance (tax-free) | $257,171 |
| Equivalent taxable account balance (after taxes) | $134,413 |
| Tax saved on contributions each year | $1,161 |
Worked example
Contributing $4,300/year (2025 self-only limit) at a 22% federal + 5% state rate for 25 years at 7% return, with $500/year in medical withdrawals: the HSA grows to roughly $259,000 tax-free. A taxable account with the same after-tax dollars earning 7% — but paying taxes on dividends and gains each year — reaches about $185,000. The triple-tax advantage: $74,000 extra, purely from the tax structure.
Frequently asked questions
What are the 2025 HSA contribution limits?
The IRS set the 2025 HSA limit at $4,300 for self-only HDHP coverage and $8,550 for family coverage (IRS Rev. Proc. 2024-25). Those age 55+ can add a $1,000 catch-up contribution. You must be enrolled in a High Deductible Health Plan (HDHP) to contribute.
Can I invest my HSA or does it just sit in a savings account?
Most HSA custodians allow investing after a minimum cash threshold (often $1,000–$2,500). Providers like Fidelity and Lively offer HSAs with brokerage-level investment options and low or no fees. The investment advantage is the heart of the triple-tax strategy.
What happens to HSA funds after age 65?
After age 65, HSA funds can be withdrawn for any purpose — not just medical — without the 20% penalty. Non-medical withdrawals are taxed as ordinary income, making the HSA function like a traditional IRA. For medical expenses, withdrawals remain tax-free for life.