Most Older Adults Won’t Spend This Year’s Tax Refund… Will You?
Whenever we receive a financial windfall, whether it’s an inheritance, tax refund or bonus, it’s tempting to rush out and buy something new and shiny. Like many members of our community, this is exactly what I did when I was younger.
Ok, that’s not entirely true… I also spent some of my unexpected resources on my kids. But, I digress.
Now that I am approaching my 70s, I can’t think of anything better to do with any tax refund than to save it. I know that this may sound a little boring, but, at this point in my life, a little more financial security is more valuable than any item that I might purchase. Do you feel the same?
Most Older Adults Won’t Spend Their Tax Refund This Year
Well, as reported by AARP, according to a recent survey by TaxSlayer, 53% of taxpayers over 55 plan to use their tax refund to pay off debt rather than buying new toys.
An additional 43% will save any money that they receive, either in their retirement account, or, directly in their savings account.
53% of taxpayers over 55 plan on paying off debt with their tax refund
When you think about it, this is a major shift for a generation that has been accused of being reckless with its savings.
Are We Better at Saving Than We Thought?
It is also consistent with a recent study that found that seniors are actually much better at saving in retirement than financial planners expect us to be. Far from continuing to live beyond our means, most of us settle down in retirement and find ways to make our savings last.
Specifically, according to research by the BlackRock Retirement Institute, most U.S. households have managed to hold on to 80% of their savings after 20 years in retirement. About 33% have even managed to add to their nest egg during this time!
Most U.S. households still have 80% of their savings after 20 years
Of course, saving our tax refund won’t dramatically change our financial future. However, there are still plenty of things that we can do to improve our financial situation in our 60s and even 70s.
To help you get started, here are a few Sixty and Me articles that can help you to make a little extra cash in retirement… and hold on to what you do make!
I hope that you find these suggestions useful as you approach retirement.
If you receive a tax refund this year, what do you plan on doing with it? Paying off debt? Saving it? Buying something new? Let’s have a chat!