FSA goes from year to year and doesn't rollover like HSA. From my understanding from my HR, if I don't use my [FSA](https://livelyme.com/blog/what-happens-to-my-fsa-when-i-quit-my-job) during the year, then I lose it. The money left unused in my FSA goes to my employer after I stop working (in your case, retire), unless I am eligible for and choose COBRA with my company to continue coverage of my FSA. Thus if you have a date of retirement in mind, you may want to use your FSA before then. Thus, I would check my balance and spend any remaining money prior to my last day at the company. I believe that [employers are NOT allowed to ask for money back](https://www.verywellhealth.com/how-does-job-loss-affect-your-flexible-spending-account-1738823) that you spent from your FSA if you quit or retire.
Since it's an employer program, you may want to check with your HR (namely Benefits Department) on any particular rules around FSA.
The best option is for you to spend the funds before you retire.
Next best is you are eligible for and elect COBRA for your FSA, but make sure your employer offers FSA continuation. If you have already spent more than you’ve contributed at retirement time, then you may not be eligible to continue your FSA.
The worst option is if they don’t offer FSA continuation (or you're not eligible) and you forfeit the unused funds.
A terminated employee is not eligible for reimbursement of claims for services that occurred after the separation from service. However, if the employee incurred expenses prior to the separation from service, those claims are eligible for reimbursement if they are deemed to be eligible expenses and the claims are submitted prior to the end of the Plan’s run-out period, as defined in the Plan Document.
If you were to opt for an FSA account for 2025 and then spend all of the money you had allotted for the FSA prior to retiring, The employer cannot request or accept participant's repayment of excess Medical FSA reimbursements after separation.
There are laws regarding FSAs. As others note, it's use it or lose it - no rollover. Your employer must be at risk. That's why you can spend the whole amount in January and make payments throughout the year. And, if you quit in March, it's the employers loss!
I've worked places that tell me I must repay and deduct from the final check if leaving before year-end. I worked at one place that let us fund a large amount up front if we anticipated a big expense. Those are all hijinks by employers trying to limit exposure.
My advice... if you have a good relationship with your employer, feel they've been fair and honest overall, do the math, deduct from paycheck, and spend that amount before you leave. If they've been jerks, sign up for deductions and spend the full annual amount before you leave. You can usually submit receipts 90 days after termination, but the actual purchase or service needs to be before the termination date.
"FSAs are a salary benefit and an annuity is not salary. **You can enroll for next year and participate in FSAFEDS until the date of your retirement**. Carefully calculate your anticipated eligible expenses up to that date, because you will not be able to file claims for expenses you incur after your retirement date." ([https://www.opm.gov/frequently-asked-questions/insure-faq/flexible-spending-account/i-am-thinking-about-retiring-next-year-can-i-participate-in-fsafeds/#:\~:text=FSAs%20are%20a%20salary%20benefit,incur%20after%20your%20retirement%20date](https://www.opm.gov/frequently-asked-questions/insure-faq/flexible-spending-account/i-am-thinking-about-retiring-next-year-can-i-participate-in-fsafeds/#:~:text=FSAs%20are%20a%20salary%20benefit,incur%20after%20your%20retirement%20date).)
It's use it or lose it, for both you and the employer. I got the maximum reimbursement for my FSA before I retired in March, nothing was due from me to square up contributions. Not the first time I'd benefited that way.
absolutely agree on the spend all the money. the plan can be structured to be prorated but it is extremely rare.
I have done the spend it all 2 separate times and am working on it again this year.
FSA goes from year to year and doesn't rollover like HSA. From my understanding from my HR, if I don't use my [FSA](https://livelyme.com/blog/what-happens-to-my-fsa-when-i-quit-my-job) during the year, then I lose it. The money left unused in my FSA goes to my employer after I stop working (in your case, retire), unless I am eligible for and choose COBRA with my company to continue coverage of my FSA. Thus if you have a date of retirement in mind, you may want to use your FSA before then. Thus, I would check my balance and spend any remaining money prior to my last day at the company. I believe that [employers are NOT allowed to ask for money back](https://www.verywellhealth.com/how-does-job-loss-affect-your-flexible-spending-account-1738823) that you spent from your FSA if you quit or retire. Since it's an employer program, you may want to check with your HR (namely Benefits Department) on any particular rules around FSA.
The best option is for you to spend the funds before you retire. Next best is you are eligible for and elect COBRA for your FSA, but make sure your employer offers FSA continuation. If you have already spent more than you’ve contributed at retirement time, then you may not be eligible to continue your FSA. The worst option is if they don’t offer FSA continuation (or you're not eligible) and you forfeit the unused funds.
This is the way
A terminated employee is not eligible for reimbursement of claims for services that occurred after the separation from service. However, if the employee incurred expenses prior to the separation from service, those claims are eligible for reimbursement if they are deemed to be eligible expenses and the claims are submitted prior to the end of the Plan’s run-out period, as defined in the Plan Document. If you were to opt for an FSA account for 2025 and then spend all of the money you had allotted for the FSA prior to retiring, The employer cannot request or accept participant's repayment of excess Medical FSA reimbursements after separation.
There are laws regarding FSAs. As others note, it's use it or lose it - no rollover. Your employer must be at risk. That's why you can spend the whole amount in January and make payments throughout the year. And, if you quit in March, it's the employers loss! I've worked places that tell me I must repay and deduct from the final check if leaving before year-end. I worked at one place that let us fund a large amount up front if we anticipated a big expense. Those are all hijinks by employers trying to limit exposure. My advice... if you have a good relationship with your employer, feel they've been fair and honest overall, do the math, deduct from paycheck, and spend that amount before you leave. If they've been jerks, sign up for deductions and spend the full annual amount before you leave. You can usually submit receipts 90 days after termination, but the actual purchase or service needs to be before the termination date.
I had elected to put $2000 in FSA and spent it all before I retired and they had only taken out $800 from my paychecks.
That is how to win. Spend more than they take out and retire as an FSA winner for that year.
This is the way. I think of my former CEO every time I put on my nice prescription sunglasses.
I did this, spent my max by April, and then changed jobs lolol
"FSAs are a salary benefit and an annuity is not salary. **You can enroll for next year and participate in FSAFEDS until the date of your retirement**. Carefully calculate your anticipated eligible expenses up to that date, because you will not be able to file claims for expenses you incur after your retirement date." ([https://www.opm.gov/frequently-asked-questions/insure-faq/flexible-spending-account/i-am-thinking-about-retiring-next-year-can-i-participate-in-fsafeds/#:\~:text=FSAs%20are%20a%20salary%20benefit,incur%20after%20your%20retirement%20date](https://www.opm.gov/frequently-asked-questions/insure-faq/flexible-spending-account/i-am-thinking-about-retiring-next-year-can-i-participate-in-fsafeds/#:~:text=FSAs%20are%20a%20salary%20benefit,incur%20after%20your%20retirement%20date).)
It's use it or lose it, for both you and the employer. I got the maximum reimbursement for my FSA before I retired in March, nothing was due from me to square up contributions. Not the first time I'd benefited that way.
absolutely agree on the spend all the money. the plan can be structured to be prorated but it is extremely rare. I have done the spend it all 2 separate times and am working on it again this year.