Covid-19 Makes FSA Contribution Decisions Trickier
The contribution limits for health-care FSAs remain the same for 2021: $2750 a year.
Financial planner Donovan Brooks in St. Joseph, Mo., recommends finding a baseline for your routine eligible health expenses and matching your annual FSA contributions to that amount. A good place to start is with dental, vision and health insurance deductibles, he said.
However, figuring out how much to contribute for next year may require a different calculus. For instance, some people may have had lower health-care costs in 2020 because they may have postponed trips to the dentist or doctor.
If you expect to postpone visits again, you may wish to reduce the amount you will contribute to your 2021 FSA.
Then again, some people may wish to contribute more to health-care FSAs in 2021 as the virus rages on and they are worried about getting sick, Mr. Brooks said. And those who plan to have medical procedures that were delayed in 2020, should consider boosting contributions.