This Tax Season, Lincoln Financial Shares Latest Tax Trend Research and Expert Tips for Maximizing Returns
Lincoln Financial’s recommendations can help consumers leverage tax refunds for financial planning
“While it’s tempting to splurge on short-term indulgences when that refund comes, it’s crucial to consider long-term financial goals. Lincoln Financial supports customers in making informed decisions and encourages them to prioritize financial wellness by considering options like saving for emergencies, paying down debt and investing in retirement,” says
Saving for emergencies
The survey found that the most prevalent approach among
Paying down debt
Many Americans surveyed, particularly Millennial respondents (47%), plan to use their tax refunds to reduce debt burdens.1 When using a tax refund to pay down debt, individuals can go beyond the usual monthly payment and designate an amount that exceeds the minimum requirement. Debts with high interest rates should be prioritized, as paying off these debts first can lessen interest payments over time.
Additionally, those paying down debt can explore online budgeting tools that provide insights on how to allocate tax refunds. For example, Lincoln Financial offers a debt calculator for those on the path to debt repayment. This debt calculator allows individuals to model repaying a debt in a specific timeframe or repaying a set amount.
Americans should seek advice from a financial professional to best determine how tax refunds can be applied to a reasonable repayment plan.
Save for retirement
Only 13% of surveyed Americans plan to put their tax refunds towards their retirement savings, despite maximizing retirement contributions being a sound decision for long-term financial wellness.
Although tax returns can’t directly be contributed to employer-sponsored 401(k)s, Americans can temporarily increase their contributions and leverage their tax returns to compensate for those additional dollars being designated for retirement. This strategy allows individuals to boost their retirement savings and benefit from the tax advantages associated with contributing to a 401(k) plan throughout the year.
Additionally, it’s important to note the available Saver’s Credit through the
During this tax season, Lincoln Financial remains committed to empowering individuals with the knowledge needed to make informed financial decisions with their tax refunds. By prioritizing emergency savings, debt repayment, and retirement planning, Americans can embark on the journey towards a brighter financial future.
1 Lincoln Financial, Consumer Sentiment Tracker,
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