Maximize Savings with IRAs & HSAs Before Tax Day

Tax Day is fast approaching, and it's time to take stock of opportunities to reduce your tax burden and grow your savings. Two often-overlooked tools — the Individual Retirement Account (IRA) and the Health Savings Account (HSA) — offer unique tax advantages that can make a significant impact on your financial health. Whether you're planning for retirement or managing healthcare costs, maximizing your contributions to these accounts before April 15, 2025, is a step worth taking.

Contribute to Your HSA

The Health Savings Account offers a unique triple tax benefit: tax-deductible contributions, tax-free withdrawals for medical expenses, and tax-free growth. As you consider your options, remember that the deadline for the 2024 tax year contributions is April 15, 2025. The contribution limits for 2024 are $4,150 for individual coverage and $8,300 for family coverage, with an additional $1,000 catch-up contribution allowed for those 55 or older.

HSAs are invaluable for saving for both short-term medical expenses and long-term healthcare needs. By allowing your HSA funds to grow over time, you can significantly bolster your future healthcare resources. For example, imagine depositing $4,150 at the beginning of the year and not using it immediately. The compounded growth can substantially increase your savings over the years. It's wise to consult with a financial advisor or tax professional to determine your eligibility and precise contribution limits.

Maximize Your IRA Contributions

With the 2024 deadline of April 15, 2025, in mind, it’s important to focus on maximizing your IRA contributions. For those under 50, the annual contribution limit is $7,000, while those aged 50 and older can contribute up to $8,000. These contributions not only bolster your retirement savings but can also reduce taxable income, depending on your income and filing status.

Be sure to verify your eligibility for a Roth IRA or a traditional IRA to make the most informed decision. A Roth IRA offers tax-free growth and tax-free withdrawals in retirement if qualified, while a traditional IRA may provide immediate tax deductions. Consult a financial advisor to explore the best option tailored to your circumstances. Remember to act before April 15, 2025, to take full advantage of these savings opportunities; double-check your account balances and make contributions today to avoid the last-minute rush.