Budgeting for future expenses can be hard. After all, you never know when something unexpected will land you in the emergency room. But there are a few important things you can take into consideration. Here’s a few tips on planning for next year’s contributions.
First, start with your deductible, expected medication costs, copays for upcoming doctor’s visits and any planned treatments or surgeries. Second, gather your receipts from last year, and remember to include dental and eye exams, and eyewear expenses. Then, add those up for yourself and your dependents to give you a good idea of how much you will spend the next year. Keep in mind there is an annual contribution limit.
With an FSA, it’s important to know how your employer’s plan works. There are three end-of-year spending options: use it or lose it, rollover, and grace period. There is a risk you could lose some of your FSA finds if you don’t spend them all. Other plans offer up to $500 rollover, or an extended period of up to 2 and a half months to spend any leftover money.
An HSA is a little different. At the end of the plan year, whatever is left just rolls over to the next year.
Remember, with an FSA or HSA, you’re setting money aside BEFORE taxes are taken out of your paycheck. You can save up to 30% on your out-of-pocket expenses!