Your hard-earned money is slipping through your fingers, and you might not even realize it. Every year, millions of Americans unknowingly forfeit hundreds of dollars from their Flexible Spending Accounts (FSAs) simply because they don’t use the funds in time. Unlike Health Savings Accounts (HSAs), which let you roll over unused balances indefinitely, FSAs typically have a 'use it or lose it' policy, meaning any leftover money disappears at year’s end. But here’s where it gets interesting: you don’t have to let that happen. According to The Wall Street Journal, citing data from the Employee Benefits Research Institute, about 10 million Americans abandon their FSA funds annually, totaling a staggering $4 billion in lost savings. That’s right—$4 billion! And this is the part most people miss: you have more options than you think to maximize those pretax dollars before the clock runs out.
First, let’s talk rollovers. Some employers allow you to carry over a portion of your FSA funds into the next year. The IRS currently caps this rollover at $660, so check your plan details to see if you qualify. Even better, about two-thirds of U.S. employers offer a grace period extending into the spring, giving you extra time to spend those funds. But don’t wait—time is ticking!
Now, the big question: What can you actually spend FSA funds on? The answer might surprise you. From skincare bundles and red-light therapy face masks to foot massagers, Oura rings, and even Peloton bikes, the list of eligible items is more expansive than you’d expect. Major retailers like Costco, Walmart, Target, and Walgreens accept FSA funds, but if you’re looking for a one-stop shop, online marketplaces like the FSA Store, Truemed, and Shop WealthCare specialize in FSA-eligible products, making it easier than ever to find something that fits your needs.
But here’s the controversial part: While FSAs are designed to cover medical expenses, the line between 'medical necessity' and 'lifestyle upgrade' can sometimes blur. For instance, is a foot massager truly a medical expense, or just a nice-to-have? The IRS guidelines can be vague, leaving room for interpretation. What do you think—should FSAs allow for more flexibility in what qualifies as an eligible expense? Let’s debate it in the comments!
With only a few days left in the year, now’s the time to get those ducks in a row. Don’t let your FSA funds go to waste. Whether you’re stocking up on essentials or treating yourself to something that improves your well-being, make sure every dollar counts. And while you’re at it, stay informed—sign up for our newsletter to get the latest updates delivered straight to your inbox. Your wallet will thank you.
