If you have a flexible spending account, the clock is running out on money you already earned.
Most healthcare FSAs operate on a calendar-year basis, which means funds set aside in 2024 typically must be spent by December 31 or forfeited.
And forfeited dollars don't vanish into thin air — in most cases, they go back to your employer.
Roughly 20 to 30 percent of FSA participants forfeit money every year, according to industry surveys, with the average loss hovering between $100 and $300.
For a household already squeezing every dollar, that's a real hit.
Unlike an HSA, which rolls over indefinitely and can be invested, an FSA is a use-it-or-lose-it arrangement.
Your employer does get a grace period option — up to two and a half months — or a carryover of up to $640 for 2025, but they don't have to offer either.
Check your plan documents; assuming you have a grace period when you don't is how people lose money.
Here's the uncomfortable math: your contributions come out of your paycheck pre-tax, so you saved on income tax going in.
But if you forfeit the balance, you paid taxes on the income before you set it aside, then lost the money anyway.
You're worse off than if you'd never enrolled.
The spending deadline is also a quiet windfall for employers.
Under IRS rules, forfeited funds can be used to offset the cost of administering the plan — which some companies do — but employers aren't required to spend it on employees.
First, log into your FSA portal today, not next week.
Then check whether your plan has a grace period or carryover, and note the actual date, because it varies wildly by employer.
Eligible expenses are broader than most people think: prescription glasses and contacts, dental work, therapy, bandages, menstrual products, sunscreen with SPF 15 or higher, breast pumps, and over-the-counter medicines if your plan allows them.
You can often buy eligible items online and get reimbursed later, so you don't need a doctor's appointment to drain the account.
If you buy online at 11:58 p.m. on December 31, the charge may post in January.
Many plans go by the date of service or purchase, not the date it hits your card, but some don't.
Fourth, remember that a dependent care FSA runs on the same deadline with its own separate rules, and its forfeiture rules are even less forgiving.
If you're paying daycare or after-school costs, confirm what's left in that account too.
The closing thought: FSAs aren't a scam, but they're a bet — you're wagering that you can predict your medical spending a year in advance, and your employer holds the house edge.
If you routinely leave money on the table, it may be worth running the numbers next open enrollment instead of defaulting to the same contribution.
Final Thoughts
The most reliable move is boring: estimate low, spend deliberately, and never let December surprise you.