There are few things more annoying than forfeiting money you already earned.
Yet every year, millions of American workers do exactly that with their flexible spending accounts, watching hundreds or even thousands of dollars evaporate because they missed a deadline they barely knew existed.
If you set aside pre-tax dollars through an FSA at work, the clock is running out.
Most plans operate on a calendar-year basis, which means the funds you elected for 2024 typically must be spent by December 31.
Miss it, and that money goes back to your employer.
The stakes are higher than many people realize.
According to the Employee Benefit Research Institute, workers forfeited roughly $300 million in FSA funds in a single recent year.
The average participant who loses money is out a few hundred dollars, but some forfeit well over $1,000 — real cash that could have covered glasses, prescriptions, therapy, or a dental crown.
Some employers offer a grace period, giving you until March 15 of the following year to spend down your balance.
Others use a carryover rule, letting you roll a limited amount — currently $640 for 2024 — into the next plan year.
But many offer neither, and the rules are set by your employer, not by you.
That means the single most valuable thing you can do this week is log into your benefits portal and read the fine print.
Search for terms like "grace period," "carryover," and "run-out period." The run-out period is separate from the spending deadline — it's the window after December 31 during which you can still submit receipts for purchases you already made.
Confusing the two is a common and costly mistake.
Once you know your actual deadline, the strategy is straightforward: spend the balance on things you'll genuinely use.
FSA dollars cover a wider range than people assume.
Prescription glasses and contact lenses qualify, including sunglasses with a prescription.
So do bandages, thermometers, blood pressure monitors, acne treatments, sunscreen with SPF 15 or higher, and menstrual products.
Dental work, copays, therapy sessions, and hearing aids all count too.
You can also stock up on eligible over-the-counter medications if your plan allows them without a prescription — a change Congress made permanent in 2020.
And if you're due for a physical, eye exam, or dental cleaning anyway, scheduling it before the deadline kills two birds.
One important warning: do not use an FSA debit card at the last minute without checking that the item is eligible.
Improper purchases get flagged, and you may have to repay the money.
Keep your receipts, since the IRS requires substantiation for many claims.
If you're staring down a balance you can't possibly spend, a few retailers and online FSA stores let you filter products by eligibility, which makes it easier to convert leftover dollars into useful household supplies rather than losing them outright.
Just avoid panic-buying things you'll never touch — that defeats the purpose of tax-free savings.
The bigger takeaway is planning for next year.
If you consistently forfeit funds, you're electing too much.
If you consistently run out by October, you may be leaving tax savings on the table.
Your election should track your actual predictable medical spending, not a round number that sounded reasonable during open enrollment.
Our take: the FSA deadline is one of the few financial cliffs entirely within your control, and ignoring it is like leaving cash in a drawer you never open.
Spend ten minutes checking your balance and your plan's rules today.
Final Thoughts
That small bit of homework is the difference between using your money and donating it to your employer's bottom line.