WASHINGTON, Feb. 23, 2023 — In a recent study from NerdWallet, 55% of Americans expect a tax refund this year. Your refund check is an excellent opportunity to set yourself up for long-term financial security.
Finseca, or FINancial SECurity for All, encourages Americans to consider the following four ideas before spending this year’s refund.
1. Pay off debt. If you’ve got a significant amount of debt, using your tax refund to pay it down could be the best use of the money. Secure 2.0, signed into law in 2022, allows employees with an outstanding balance of qualified student loans to repay the loan while employed, and still have the employer contribute a matching contribution to the employee’s retirement plan.
2. Increase your 401(k) or Individual Retirement Account (IRA) contributions. Specifically, you should make an effort to immediately put 5% of your paycheck away into a retirement account — particularly if your employer offers a match. Retirement savings have a tax advantage, so the real cost to you is extremely small.
3. Save it. Even saving a small amount in your 20s can make a significant impact when you are older, and it’s all thanks to the magic of compound interest.
4. Consider your protection options. Getting life insurance while you’re young and healthy is extremely affordable. Start by thinking about your term options and talk to your financial security professional about the benefits of permanent life insurance when you’re young.
Remember, every taxpayer’s financial situation is different, so don’t feel like you have to make all these decisions yourself– talk to a professional. One of the best ways to learn about investing is through financial security professionals, preferably a Finseca professional.
About Finseca
At Finseca, we know that financial security improves people’s lives and protects their livelihoods and future wellbeing. We are rising to the challenge of increasing financial security for all. Finseca represents the men and women of the financial security profession who dedicate themselves to delivering financial security to their clients every day.
