It’s the time of the year where we are done filing our taxes and if you overpaid on your taxes you will be receiving a refund. There are many ways to put that refund to use.
One way is to consider increasing your Roth or 401 K contribution. Consider increasing your contribution rate for the rest of the year to match the refund amount. Look at your refund as found money and invest it for future years. It’s no secret that you are better off putting money aside early in life and no money later versus no money now and contributing later in life. This is due to compounding effect of money – earlier funding has more time to grow (compound).
So invest in your future now. Even if you can’t invest 100 % of the refund, consider investing 50 %; something is better than nothing.
Author: David A. Kinka, CPA, Chief Financial Officer