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Kip Tips

Flex Account Money: Use It or Lose It

A March 15 deadline is looming for some employees to spend 2010 FSA funds.

Workers leave $86, on average, in their flexible spending accounts each year. If your employer gives you until March 15 to spend 2010 FSA money, don't let it go to waste. You must use it by that deadline, or you'll lose it.

There are plenty of smart ways to spend these pre-tax dollars you've set aside for out-of-pocket medical costs. You're not limited to using the money for co-pays or prescription drugs. The money can help cover the cost of eyeglasses, acupuncture, dental care and even smoking-cessation programs (see 7 Smart Ways to Spend Flex Money).

You also can combine leftover 2010 flex funds with the entire amount you've designated for 2011 to pay for big-ticket items, such as laser eye surgery. See Make the Most of the New Flex-Account Rules for more information.

If you find that you're struggling to find ways to spend your FSA cash, you should consider adjusting the amount you set aside each year. Our calculator can help you figure out how much to contribute to your flex account.

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