There is still time to make 2023 contributions to Individual Retirement Accounts (IRAs) and Health Savings Accounts (HSAs). The deadline to make these contributions is April 15, 2024. This is helpful because there is a limit on how much can be contributed each tax year.

IRAs: Individuals with taxable compensation and their spouses can choose between Traditional and/or Roth IRAs. Contributions to traditional IRAs are tax deductible and qualified distributions are taxed at ordinary tax rates. Roth contributions are not tax deductible, however qualified distributions are not taxed.

The maximum IRA contribution limits for 2023 are $6,500 with an additional $1,000 catch-up contribution for people age 50 and older. Contributions can be put in one type of account or allocated between Roth and Traditional. You can find additional information on the IRS web site www.irs.gov.

HSAs: If you have a High Deductible Health Plan (HDHP) you can make contributions to an HSA. These type of accounts have triple tax advantages. Contributions are tax deductible, earnings are not taxed, and distributions for qualified medical expenses are not taxed. Qualified medical expenses include those for yourself, spouse, and dependents.

2023 HSA contributions limits are $3,850 for those with self-only HDHP and $7,750 for those with family HDHPs. People who are 55 and older can add an additional $1,000. The limit applies to the total of your contributions and those made on your behalf.

IRAs have long been known as an important retirement planning vehicle. However, in some situations, since a Health Savings Account provides triple tax advantages and year -to- year carryover, they provide an even more powerful retirement planning tool.

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