A flexible spending account (FSA) is a nice employee perk that lets you save for health-related expenses tax free. 🤑 But in some cases, if you don’t use up that cash by the end of the year, it does a disappearing act. 🪄💰
Wondering if you should hit up Target’s essentials aisles before the ball drops? Keep reading! 👇
Here’s Five Fast Facts on flexible spending accounts:
- 👋 Down the Drain - Every year, roughly half of all 20M Americans with an FSA account let some of the money expire. That totals up to a whopping $400B! On average, each person with leftover dollars leaves $400 on the table.
- 🩺 Different Strokes - Your employer may also offer a health savings account (HSA), which differs from your FSA. Through a medical FSA, employees can save up to $3,300 pretax to pay for eligible expenses, and you’ll need to use most or all of it by the end of the year. HSAs allow for rollovers from year to year.
- 💄 What’s New? - You might use extra FSA money to stock up on toothpaste and toiletries. But over the last several years, more cool stuff got added to the list. Think: tinted lip balm and red-light masks. Even that fancy schmancy Oura ring!
- 🧮 Savvy Savings - Don’t want to leave any money unspent next year? Pro tip: think ahead and budget your expected needs for the coming year. Shave 10% off the final number you come up with.
- ✅ Know Before You Go - Before you hit the pharmacy fast and furious, make sure to check your FSA plan rules. Many employers now allow rollovers of up to $600 into the new year.
🔥Bottom line: If you’ve got extra FSA bucks to spend and remember what “a/s/l” means, maybe it’s finally time to buy that red light mask! Feeling held hostage by your subscriptions? The new year is the perfect time to do an audit and cut that dead weight. Check out this article for ways to break free!
What are you buying with the rest of your FSA money?
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