The projection treats an HSA as its own fourth bucket with the tax shape that makes HSAs unusual: deductible going in, tax-free coming out for medical costs, ordinary income otherwise after 65.
While working
Your Profile's HSA contribution flows in annually from your paycheck (today's dollars) while a salary is being earned. It reduces income tax and FICA. It is the one account that escapes both, and contributions stop at 65, when Medicare enrollment ends HSA eligibility. It's modeled as one household HSA tied to earnings; direct contributions outside a paycheck aren't separately modeled.
The annual limit follows your age as the plan runs, not just your age today: the extra $1,000 catch-up appears in the year you turn 55, and the contribution stops in the year you turn 65. The same is true of your 401(k) limit: the age-50 catch-up and the larger one for ages 60 to 63 switch on and off on the right birthdays.
In retirement
The HSA sits outside the normal draw order:
- Qualified medical spending draws from the HSA first, tax-free. Each year's medical expense line is paid from the HSA while it lasts, displacing withdrawals the other accounts would have made.
- Non-medical HSA draws are a last resort: allowed from 65 (taxed as ordinary income, like a traditional IRA), used only when every other bucket is exhausted.
What this implies
An HSA outlasting your medical costs is fine. The surplus behaves like extra tax-deferred savings. The "HSA at longevity" figure on the Projection is that surplus: what's left after lifetime medical spending has been funded tax-free.
The model doesn't track receipts-in-a-shoebox reimbursement strategies or per-state HSA tax quirks. This is a deliberate simplification.