Not everyone is eligible to contribute to a health savings account (HSA), but if you're enrolled in a high-deductible health insurance plan, it pays to see if you qualify to participate. Not only are HSAs extremely useful during your working years, but they also function as retirement savings plans. They also come with a host of tax breaks -- namely, tax-free contributions, tax-free investment growth, and tax-free withdrawals.

Of course, the savvier you are with your HSA, the better it will serve you. To that end, here are a few tips for making the most of that account.

1. Know your maximum annual contribution

HSA limits can change from year to year, just like IRA and 401(k) limits. In 2020, you can contribute up to $3,550 to an HSA if you're participating on your own behalf. If you're funding that account on behalf of your family, that limit doubles to $7,100. But these limits are changing in 2021 to $3,600 and $7,200, respectively, so be sure to adjust your contributions if your goal is to max out.

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2. Contribute each year beyond your immediate needs

With a flexible spending account, your goal should be to only contribute money you expect to spend within a year. HSAs work differently. Because HSAs never expire, there's no pressure to estimate your exact healthcare costs for the year and limit your contribution to that figure. In fact, it specifically pays to put more money into your HSA than you expect to need in the near term, because funds that aren't used immediately can be invested tax-free and grow into an even larger sum.

It's this very HSA feature that makes it a viable retirement savings tool. If you keep overfunding your account year after year, and keep carrying your balance forward, by the time retirement rolls around, you'll potentially have a large pool of cash to use for healthcare -- which will likely be one of your most significant expenses once you stop working.

3. Make catchup contributions to your account

Much like IRAs and 401(k)s, HSAs allow savers to make catchup contributions when they're older. The difference, however, is that with an IRA or 401(k), catchups begin at age 50. With an HSA, they begin at 55. Once you reach that point, you can contribute another $1,000 on top of the limit that already applies to you.

4. Stop contributing once you enroll in Medicare

Though you're allowed to withdraw funds from your HSA to pay for Medicare expenses like premiums, deductibles, or copays, once you actually enroll in Medicare, you're no longer eligible to participate in an HSA. Stop making contributions before you sign up for Medicare so you're not hit with a tax penalty. Medicare eligibility begins once you turn 65, though you can enroll up to three months before the month of your 65th birthday.

The more thought you put into your HSA, the better it will serve you -- both now and during retirement. Pay attention to the above points so you don't miss out on the opportunity to reap significant tax savings in the course of setting funds aside for healthcare.