On Friday, I blogged about the importance of maximizing your match in December. Year-end tip number two concerns flexible spending accounts (FSAs). Like a 401(k) match, paying attention to your FSA makes sense 12 months of the year, yet still presents some critical opportunities as the year winds down.
Here’s a refresher on the benefits (and risks) of Flexible Spending Accounts.
The end of the year matters for FSA because many plans require that you completely use the funds you set aside by December 31 (Some plans have extended the deadline slightly, but even stil, the deadline is nearing). Those funds that you don’t use are lost forever. Financially, allowing this to happen is never a smart move.
Don’t do that.
If you have a health care reimbursement account and you accidentally overestimated the amount of medical expenses you would have and are now sitting on a couple of hundred bucks that you will lose if you don’t spend it by December 31, now is the time to stock up on long shelf-life over-the-counter products that are covered by your FSA (ask HR for the guidelines).
Don’t wait until the last minute to take care of this. This is a good use of your time.
Tags: flexible spending accounts, fsas, health care reimbursement accounts, yearend planning
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