How to maximize my HSA after barely using it?

Saving Discussion Topics
1

Looking for advice on making the most of my HSA after not contributing to it for a couple of years.

I started working in January 2022 and have had an HSA since then, but I never put any money into it. My employer contributes a fixed $720 annually in bi-monthly $30 payments. I know I missed out on previous years’ contributions, but I’m focusing on what I can do now.

From what I understand, I can still contribute for 2024 until April 15th. So far, only my employer’s $720 has been added, meaning I can still contribute $3,430. I know it’s better to contribute through payroll rather than after-tax money, and my company allows me to adjust my contribution amount at any time. I have 21 paychecks left this year.

Here’s my current plan:

  1. Contribute the rest of the 2024 max amount as soon as possible (after-tax if needed).
  2. For 2025, contribute the remaining allowed amount through payroll: (2025 limit - employer contribution) ÷ number of paychecks.

But I’m wondering—would it be better to max out my HSA immediately rather than spreading it evenly across the year? If I can afford to take a hit on my next couple of paychecks to fully fund it and start investing, should I go that route?

Appreciate any insights or personal experiences.

2

You might find this useful: https://www.madfientist.com/front-loading/

3

Amos said:
You might find this useful: https://www.madfientist.com/front-loading/

That’s my approach when possible. Same with 401ks—I try to max them out as early as I can.

I also avoid using my HSA for medical expenses. I pay out of pocket and let the HSA grow over time.

4

@JohnHarris
Technically, your HSA is still your money, even if it’s invested. When you use cash or a credit card instead of the HSA, you’re just choosing to leave that money untouched.

5

Lilnim said:
@JohnHarris
Technically, your HSA is still your money, even if it’s invested. When you use cash or a credit card instead of the HSA, you’re just choosing to leave that money untouched.

Yeah, I get what you mean. My point was that I don’t withdraw from my HSA for medical bills—I just pay them like any other expense.

6

If you’re investing your HSA funds, then yes, maxing it out as early as possible can help. The tax benefits remain the same regardless of when you contribute, but the earlier you invest, the more time your money has to grow.