April 15th, So Where Should the Refund Go?
Happy April 15! A recent survey shows that the average American is getting just under $3000.00 as a refund.
The retail federation hopes you’ll buy yourself something nice. research shows that in this economy only about 7% will oblige. The rest of us have a fairly even split as to where we think that refund check should go:
- Pay down high-interest rate debt.
- Fund your retirement account.
- Fund an emergency savings account. Putting aside your tax refund in an emergency account can help tide you over should a job loss or unexpected expense occur.
Here’s what Greg McBride,senior financial analyst, Bankrate.com has to say:
“I find that troubling, considering how woefully under-saved for retirement our society is,” McBride says. “The recent survey from the Employee Benefit Research Institute
showed that 54 percent of Americans have less than $25,000 saved for retirement. The tax refund is the biggest windfall people are going to get all year,” he says.
Three percent of those getting a refund took a refund anticipation loan. For people with incomes under $30,000, that number jumps to 6 percent.
“Here is what that really means: You gave your money to the government for free all year and now you need it back so quickly that you’re going to pay a high interest rate just to get your own money back that you could have had all year,” says McBride.