FirstStepsInvesting

Decoder · Accounts

FSA (flexible spending account)

A use-it-mostly-or-lose-it account through an employer for health or dependent-care costs, funded pre-tax from your paycheck. The 2026 health FSA limit is $3,400 (per Rev. Proc. 2025-32 — a widely copied $3,350 figure is wrong). Unlike an HSA, the money generally does not roll over beyond a small carryover and does not travel with you when you change jobs.

For your first $100: An FSA is a spending tool, not an investing step. Fund it for costs you are sure of; it never appears in the order of investing steps.

401(k), in plain words403(b), in plain wordsEmployer match, in plain words

← High-deductible health plan (HDHP) · All 50 cards · Contribution limit →

See this word inside your order