50 simoleons, sawbucks, scratch… whatever you call it, that’s how much more participants can contribute to their health savings accounts (HSA contribution limits) in 2018.
The Internal Revenue Service released contribution limits for health savings accounts, and next year’s annual limitation on deductions for an individual with self-only coverage under a high deductible health plan is $3,450, an increase of $50 dollars from 2017.
For calendar year 2018, the annual limitation on deductions for an individual with family coverage under a high deductible health plan is $6,900, an increase from $6,750.
The HSA contribution limits for 2018, a “high deductible health plan” is defined as a health plan with an annual deductible that is not less than $1,350 for self-only coverage or $2,700 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $6,650 (an increase from $6,550 in 2017) for self-only coverage or $13,300 (an increase from $13,100) for family coverage.
It’s something for 401(k) advisors to be aware, as the number of assets in HSAs “rose steadily” to $30.3 billion, a 16.7 percent increase year over year. Current projections show it continuing and the HSA industry is on track to reach $50 billion in assets by 2018, according to new information shared by 401(k)-provider giant Ascensus.
The company identified key trends in how Americans save in an analysis of 40,000 retirement plans, 3.8 million 529 college savings accounts and 200,000 HSAs that it administers.
The number of HSAs, in particular, increased 22 percent in 2015, with 16.7 million open accounts, and are favored by savers at or near retirement.
Savers over age 55 account for 34 percent of the health savings assets on the Ascensus platform, suggesting that more savers are leveraging HSAs as a tool to increase overall retirement savings.
Additionally, savers over 65 are realizing the value of investing in HSAs, with the highest average in health savings of over $3,400.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
