- Bargaineering - http://www.bargaineering.com/articles -

How to Set FSA Amount

The last post on how to spend down your FSA [3] was designed for folks who have just a few dollars left in their account. If you have a few hundred dollars left, you need to do more. You still have to spend it, because FSA balances are lost if you don’t spend it before the year ends, but you need to adjust your FSA amount down to more accurately reflect how much you need. It’s great to have that tax-free money to spend on medical supplies, as long as you need the medical supplies!

This is how we go about setting our FSA amounts.

This post is part of the Bargaineering Annual Financial Review [4] week series where we take a closer look at the four major facets of personal finance and see if we can do better. This post is part of day four – beating back the tax man.


First, consider how many times you’ll be visiting the doctor or other medical professional in an average year. For me, I go to the dentist twice a year and the family physician once a year. The dentist has no co-pay but the physician has a $15 co-pay. Assuming all is well and good, my co-pays each year are a svelte $15.

Medical Supplies Use

Next, go through all the OTC drugs and other supplies you might use throughout a year. I consume Loratadine [5], the antihistamine in allergy drug Claritin, at about a bottle a year so I need to put that into the sum. We might go through a box of band-aids each year and I use contact lens solution at a rough rate of five bottles a year. I add that all up and arrive at some value for regular medical supplies use.

Special Planning Cases

Most of the major non-emergency medical expenses are planned ahead of time. Perhaps you want to get Lasik vision correction done, you will want to account for that and increase your FSA amount. If you are planning on starting a family, you might want to increase your amounts to account for the increased doctor’s visits. It could be something as minor as planning a cruise, so you’ll add a little extra to buy some sea sickness remedies. Think about the plans you have for the next year and whether you could pay for some of it out of the FSA.


The hardest part about setting the FSA is for the “what if” scenarios. I personally don’t include these in my FSA amounts. The benefit of having the FSA money in the event of an emergency doesn’t outweigh the drawback of being forced to spend that money if an emergency doesn’t happen. However, if you want to include an extra percentage amount (10%) to cover emergencies, it won’t break the bank.

I hope this brief guide was helpful in providing insight into how you can better set your FSA amounts. Did I miss any major categories?