Share your insights or perspective on the financial matter presented in the input.

FSA when a retirement agreement has been put into place
There's no reason for the employer not to deduct the whole amount before you leave. The FSA salary deduction has to be periodical, but it doesn't have to be calculated over a year. It just means that an equal amount will be deducted from your every paycheck, and if the employer (and you) know that your last paycheck is on June 30th even before the year starts - there's nothing to stop the employer from calculating the periodic payments so that it will cover your full FSA amount before you leave. That is, of course, other than mere convenience (it may be easier/cheaper to just give you the extra $1275 than to deal with the special case deduction calculation). This is different from unexpected termination/resignation, where the employer couldn't have made such an assumption and thus the periodic payments were calculated over a year. See pub. 969. The selection is annual - the deductions are periodical.