Don't Let Your FSA Funds Go to Waste: Why December is Decision Month
Hey there, savvy spenders! If you’ve been contributing to a Flexible Spending Account (FSA) this year, listen up! December is here, and it's an important month for you. With the end of the year closing in, it's time to make sure you don’t lose any of that hard-earned cash you’ve set aside for healthcare. Let’s break it down!
What’s the Big Deal About FSAs?
So, what’s an FSA? It’s a super handy account offered by some employers that lets you set aside pre-tax dollars for medical expenses. This means you can save a chunk of money on those unexpected costs since you don’t pay taxes on the money you put into it.
For example, if you’re in the 22% tax bracket, that means you could save 22% on qualifying purchases. Pretty sweet, right?
The Deadline Is Looming!
Here's the kicker: Unlike other accounts like 401(k)s or Health Savings Accounts (HSAs) where your money can sit and grow over the years, the money in your FSA usually has to be spent by Dec. 31. If you don’t use it, you’ll lose it. Yep, all that cash you contributed will vanish like a puff of smoke!
Some plans offer a little flexibility, like letting you carry over a small amount or giving you a brief grace period into the new year. But many don’t, so check your specific plan details ASAP!
What Should You Do With Your Remaining FSA Funds?
If your FSA balance is looking a bit hefty this December, don't panic! You've got options to spend that money wisely and make sure it’s not going to waste:
Get Some Last-Minute Medical Care: If you've been putting off a dental check-up, eye exam, or even getting that pair of glasses, now's the time! Schedule those appointments before the clock runs out.
Stock Up on Medical Supplies: You can purchase loads of qualifying products with your FSA funds. Think about over-the-counter medicines, first-aid supplies, feminine products, and more. Have a look at the list of FSA-eligible items for ideas!
Emergency and Wellness Items: Consider picking up stuff like cold medications or band-aids. You’ll thank yourself later when you need them!
The Bottom Line
Don’t let your FSA funds slip through your fingers! December is the perfect month to make the most of your contributions. Dive in, check your balance, and spend that money wisely before it disappears. If you’ve been smart about saving, you can ensure that your FSA works for you and not against you.
For more tips on managing your finances and investing for the future, stay tuned! Happy spending!
About the Author
Christy Bieber is a contributing expert on retirement and Social Security at The Motley Fool, covering everything from retirement planning to personal finance. An avid writer since 2008, Christy also has a background in business education and holds a law degree from UCLA.
Feel free to share this blog with your friends and family who might benefit from knowing the ins and outs of FSAs!
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