How Your FSA Really Works🧠
What is an FSA?
FSA = Pre-tax money for your health & wellness
You elect up to $3,300 (2025 limit) each January or when you start a new job
You pay it back in equal installments deducted from your paycheck over the course of the year
Every FSA dollar is spent tax free, that means you save ~30% when you pay with your FSA vs. your checking account
What if I forget to use it?
$12 Billion in FSA dollars go unspent every year
The average amount forfeited is $441
Forfeited FSA dollars (which came from your paycheck) go back to your employer, effectively reducing your pay
Your employer doesn’t remind you to use your FSA… because they get to keep what you don’t spend
You already paid for this money—you just have to claim it
What happens if Iose my job?
Your FSA disappears the moment you do, back to your employer
If you quit or get laid off, your entire remaining FSA balance is gone instantly—even if it’s only January
The only way to protect your money is to use your FSA early in the year, before it can disappear
If you buy what you already need ASAP, you lock in those savings no matter what
