FSAs And HSAs: Saving For Your Health Without Income Limitations

Jackson Keenan, CFPby Jackson Keenan, CFP®


Many of MONTAG’s clients have too much income to benefit from saving into a Traditional IRA or Roth IRA. Luckily there are methods available to save, reduce your taxes, and plan for medical expenses all without income limitations.


Flexible Spending Arrangement (FSA) 

A Healthcare FSA allows you to be reimbursed for medical expenses. They are usually funded through pre-tax contributions and are free of employment or federal income taxes. Your employer may also contribute. For 2023, the maximum contribution is $3,050. There is one BIG catch, however:  If you do not use all contributions, the most you can carry over is $610.


Health Savings Account (HSA)

HSAs are a type of savings account that let you set aside money on a pre-tax basis to pay for qualified medical expenses. These include deductibles, copayments, coinsurance, dental, vision, and prescriptions, and many other medical costs. Note: HSA funds generally may not be used to pay insurance premiums.

There are no income limitations to fund an HSA, but you must have a High Deductible Health Plan (HDHP.) For 2023, the HDHP qualifications are as follows:


Self-Only Coverage

Minimum Annual Deductible: $1,500

In-Network Maximum Annual Deductible and Other Out-of-Pocket Expenses: $7,500


Family Coverage

Minimum Annual Deductible: $3,000

In-Network Maximum Annual Deductible and Other Out-of-Pocket Expenses: $15,000


The 2023 HSA contribution limits are:

Self-Only Coverage:  $3,850

Family Coverage: $7,750

Catch-Up Limit for Age 55+: $1,000


What makes this an effective saving strategy is the feature that unused dollars can be rolled over. Even better, HSAs can be invested and deliver untaxed growth (FSAs cannot be invested). The combination of rollovers and investment growth can provide a large pot of tax-free dollars to use on medical expenses in retirement.    

To conclude, both FSAs and HSAs provide a valuable tool to high-income earners. Typically, medical expenses are considerably higher during retirement years relative to other costs.  If someone is eligible to fund an HSA, I prefer this method to prepare for these future outlays.   


Citation:  Publication 969 (2022), Health Savings Accounts and Other Tax-Favored Health Plans

The information provided is for illustration purposes only.  It is not, and should not be regarded as “investment advice” or as a “recommendation” regarding a course of action to be taken. These analyses have been produced using data provided by third parties and/or public sources. While the information is believed to be reliable, its accuracy cannot be guaranteed. MONTAG employees do not provide legal or tax advice. For specific legal or tax matters, you should consult with your own legal and/or tax advisors.


  • Jackson Keenan

    As Director of Financial Planning, Jackson is responsible for providing comprehensive financial planning services to MONTAG clients. He also supports Portfolio Managers with guidance and education on the topics of retirement strategies, executive compensation, insurance, taxes, and estate planning.

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