As the year draws to a close, many Americans find themselves caught up in the whirlwind of holiday preparations, travel itineraries, and work obligations. Amidst this chaos, nearly half of the populace is at risk of letting significant funds in their flexible spending accounts (FSAs) go to waste, which could amount to a loss of at least $400 per person.
Recent insights from The Wall Street Journal, based on data from the Employee Benefits Research Institute, reveal that around 10 million Americans forfeit their FSA funds annually, leading to an astounding total loss of over $4 billion each year. Unlike Health Savings Accounts, which allow balances to roll over indefinitely, FSAs typically require users to utilize their funds by the end of the year or lose them entirely.
However, there are strategies to maximize the benefits of these pretax funds. Some employers provide the option to roll over a set amount into the next year—this year, the maximum rollover permitted by the Internal Revenue Service is $660. Additionally, about two-thirds of employers offer a grace period extending into the spring, allowing employees more time to spend their FSA balances.
It’s essential for individuals to familiarize themselves with their specific contribution plans to understand their options fully. The funds can be utilized at numerous major retailers, including Costco, Walmart, Target, and Walgreens, making it easier to purchase qualifying items.
For a seamless shopping experience, online platforms like FSA Store, Truemed, and Shop WealthCare specialize in FSA-eligible products. On these sites, users can explore a range of items, from skincare sets and red-light therapy masks to wellness gadgets such as foot massagers and devices like the Oura ring, Peloton bike, or rowing machine.
With just a few days remaining in the year, it’s crucial to prioritize the use of FSA funds effectively. Taking action now can ensure that these hard-earned dollars do not go to waste.
