FSA vs HSA Calculator

Frequently Asked Questions

FSA vs HSA - which should I choose?

HSA is almost always better if you qualify (requires HDHP). It's triple tax-advantaged (deductible going in, tax-free growth, tax-free withdrawals for medical), portable, and rolls over indefinitely. FSA wins only if you can't enroll in an HSA-eligible HDHP - its tax savings are similar but funds disappear at year-end (with limited carryover/grace period exceptions).

What are the 2026 contribution limits?

HSA: $4,400 self-only, $8,750 family, plus $1,000 catch-up at age 55+. FSA: $3,400 (estimated for 2026; check IRS announcement). Dependent Care FSA: $5,000 household ($2,500 if MFS) - separate from health FSA. HSA limits are split if both spouses have HSAs but only one is on family HDHP.

Why is the HSA called "triple tax-advantaged"?

Contributions reduce taxable income (federal + FICA if payroll deduction; just federal if direct contribution). Investment growth is tax-free. Qualified medical withdrawals are tax-free at any age. After 65, non-medical withdrawals are taxed at ordinary income rates (like a traditional IRA) but penalty-free - making the HSA arguably the best retirement account for medical-heavy retirees.

Can I have both an FSA and HSA?

Generally no - a regular health FSA disqualifies you from HSA contributions. However, you can pair an HSA with a Limited Purpose FSA (dental and vision only) or a Post-Deductible FSA. Dependent Care FSAs can be combined with an HSA freely - different account purposes. If your employer offers both, ask HR which combinations are permitted under your plan.

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How This Calculator Works

Both a Flexible Spending Account (FSA) and a Health Savings Account (HSA) let you pay medical costs with pre-tax dollars, but they differ sharply on eligibility, contribution limits, and what happens to leftover money. This tool compares the two on a like-for-like basis using your planned contribution. It applies the 2026 limits, caps your contribution to whatever each account legally allows, computes the federal income-tax and FICA savings on the eligible amount, and - crucially - subtracts the FSA's use-it-or-lose-it forfeiture risk to produce a net benefit you can compare against the HSA. You enter HDHP enrollment, coverage type, marginal tax rate, age-55 catch-up status, your planned contribution, and your expected annual medical expenses.

Formula / Method

The 2026 limits used are: HSA $4,300 self / $8,550 family, plus a $1,000 catch-up at age 55+, and FSA $3,300. HSA contributions are only allowed when you are enrolled in a qualifying HDHP. Tax savings = eligible contribution × (marginal rate + 7.65% FICA). For the FSA the model estimates forfeiture = max(0, FSA contribution − expected expenses − $660 rollover), then FSA net benefit = tax savings − forfeiture × (1 − rate − 7.65%), so only the after-tax loss counts against you. HSA leftover (eligible contribution − expenses) is treated as invested for retirement, since HSA balances roll over indefinitely. The winner is the HSA when you have an HDHP and its tax savings meet or beat the FSA's net benefit; otherwise the FSA.

Worked Example

Self-only HDHP enrollee, 22% marginal rate, planning a $3,000 contribution against $2,000 of expected expenses. The HSA caps at $4,300, so the full $3,000 is eligible; tax savings = 3,000 × (22% + 7.65%) = $890, and the $1,000 left over (3,000 − 2,000) stays invested. The FSA caps at $3,300, so $3,000 is eligible with the same $890 gross savings - but only $2,000 is spent and $660 rolls over, leaving 3,000 − 2,000 − 660 = $340 at forfeiture risk. The after-tax forfeiture is 340 × (1 − 0.2965) ≈ $239, so the FSA net benefit ≈ $651. The HSA wins here on both savings and portability.

Common Mistakes

Assuming you can fund an HSA without a qualifying HDHP - you cannot, and you also lose eligibility once enrolled in Medicare.

Over-funding an FSA past your real expected spend and forfeiting the excess above the $660 rollover (or the 2.5-month grace period - employers offer one, not both).

Forgetting the FICA savings: the 7.65% payroll-tax break applies on top of income tax for both accounts.

Treating the HSA as a spending account when its real power is tax-free growth - the only triple-tax-advantaged account.

Ignoring the age-55 catch-up that adds $1,000 to the HSA limit.

Tips & FAQ

What makes a plan an HDHP for 2026? Minimum deductible $1,650 self / $3,300 family and out-of-pocket max under $8,300 self / $16,600 family. Why is the HSA called a stealth retirement account? Contributions are deductible, growth is tax-free, and medical withdrawals are tax-free; after 65 non-medical withdrawals are taxed as ordinary income, like a Traditional IRA. Can I have both? Yes - with an HSA you may still use a Limited Purpose FSA for dental and vision, stacking the tax breaks. What about childcare? A Dependent Care FSA is a separate $5,000 household cap for daycare and elder care, outside the medical rules. These are estimates only, not tax or insurance advice - confirm current limits and your plan's rollover or grace-period choice with your benefits administrator or healthcare.gov.

Frequently Asked Questions

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