Q:

Hi Scott,

In 2024, I put $900 in my Flexible Spending account (FSA).  I spent it all before year’s end.  I am thinking about putting in whatever the max is for 2025, as I might need it for some medical expenses.  Does it make sense for me to contribute that much?

A:

Hi Jane,

If you think you will use $3,300 in 2025, then contributing the maximum makes sense.  The biggest thing to be aware of is that FSAs are “use it or lose it”; if you do not use the full amount contributed in a given year for valid medical expenses (with some small caveats and exceptions), you will forfeit whatever the remaining balance to your employer at year’s end. We recommend putting an amount into your FSA that you know you will at least come close to using, so little to no money is wasted.

Best,

Scott

All questions are real questions, but for confidentiality reasons are re-written.  They are not intended as individualized advice.