New Limits on Flex Accounts Coming

Starting in 2013, the amount employees will be allowed to contribute to medical flexible spending accounts will be less.

I read that the contribution limit for flexible spending accounts is going to be reduced to $2,500 in 2013. My employer has been giving us until March 15 of the following year to use up our FSA money. Will that grace period still apply, or will I have to use up all of the 2012 money by December 31?

You’re right that annual contributions to medical FSAs will be limited to $2,500 starting in 2013 (down from $3,000 or $4,000 with some employers), but people whose employers give them until March 15 of the following year to use up the money in their accounts will still have the extra time to spend it. Most employers offer this grace period, so you won’t need to scramble to use up the money allocated in 2012 before the end of the calendar year.

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Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.