Should i use flex spending

If you do opt into an FSA, you can contribute a certain amount of money to the account with every paycheck. This money will be automatically deducted from your pay and placed in the account.

Some employers will even make contributions to employees' FSAs as part of the overall healthcare package to encourage people to contribute to and use these accounts: sweetening the pot, according to Waters. The most important thing to remember with FSAs is that those funds are use-it-or-lose-it: You must spend all money placed in an FSA by the end of the calendar year.

If you don't, that money disappears. This policy means many people scramble to use their FSA funds at the end of every year by booking non-essential appointments, purchasing new glasses, getting massages, or incurring other expenses they can pay for with remaining FSA dollars. It also means using an FSA to support your emergency fund isn't a great idea: If you're lucky and no medical emergency occurs in the calendar year, those savings disappear.

An FSA won't lower the actual costs of your healthcare expenses. Its real money-saving benefit comes from tax savings: Your contributions to an FSA are pre-tax, meaning they lower your taxable income, saving you money on taxes in the long-run. Contributing to an FSA will lower your take-home pay, but it will also lower the amount withheld for taxes—and you'll have money ready to be used for healthcare expenses when you need it.

FSA participants cannot contribute more than that to the account for extra tax savings. Also, it's worth noting that participants commit to their regular contribution amounts at the beginning of the year: Unless you have a qualified status change, such as a loss of employment, marriage, or birth of a child, you cannot change your contribution amounts until the next year.

First, remember that FSAs are employer-offered based on your health insurance plan: If your employer doesn't offer an FSA, you don't have much of a choice. If your employer does offer an FSA, you don't have to automatically opt in if it's not the right choice for you.

If you've spent very little on healthcare outside of premiums in the last few years, the money you contribute to an FSA might not be used. And for all things flex spending, be sure to check out the rest of our Learning Center , and follow us on Facebook , Instagram and Twitter. Learning Center. That's Eligible?! I'm young and healthy … why would I want an FSA? Add To Cart Add. Percogesic, Extra Strength. Mineral Ice Quick Dry Foam.

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BC Powder, Arthritis. Aspercreme Original Pain Relieving Cream, 3 oz. Re-Lieved 3-in-1 Pain Relief Patches, 60 ct. PhysiciansCare Ibuprofen. Copays and deductibles are eligible A lot can happen in a year. Each year, employees working for companies that offer an FSA must elect to participate and choose how much to contribute.

Starting the first day of the plan year, the full annual election amount is available to the FSA participant. Some vendors allow account holders to set up their FSAs so that common medical expenses — such as a visit to the doctor or a prescription purchase — are automatically sent to the vendor.

Once their funds have been exhausted, employees can no longer receive reimbursements until the following plan year. Other plans allow a grace period of two and half months. No matter the FSA plan, even if it allows carryover or has a grace period, employees must consider how much money to put into the account. If they under-spend, they could still end up losing some of their funds.