Last year, more than 70% of Americans got a refund on their federal income taxes. Are you one of the many who’s expecting a tax refund this year? There are a lot of smart choices that you can make with your refund. Let’s go over a few:
1) Use it to pay down debt.
Nothing feels better than knocking down a big debt, especially when you get it from five figures to four, or four figures to three, or….well, you get the point. Paying off debt is going to pay you back in the long run. Some people prefer to pay off their highest-interest rate debt first, while some prefer to knock out the debt that they owe the least on first. Either option is up to you, just as long as you’re making progress in reducing what you owe.
2) Save it for a down payment for a house, or a car, or a vacation.
Now, this is fun, and it usually doesn’t take much convincing to get people to save for a cruise to the Bahamas, or a great, new-smelling car, or a house to grow their family in. And if you’re debt-free enough, this is a good choice for your tax return. Just remember that R.I.A. Federal Credit Union has great auto and home loans!
3) Save it for a good, old-fashioned rainy day.
I’m talking about the kind of day when your furnace breaks and has to be replaced, or your car needs all new tires, or you drop your (uninsured) cell phone in the toilet, or the dog chews off a claw in the middle of the night and needs emergency surgery (true story). You know that kind of day. (And it’s not always a Monday. Just saying.) It’s great peace of mind to have money set aside, and now is a good time to do it.
4) All of the above taken care of? Well, then how about saving for the future with an IRA (Individual Retirement Account)?
Good news! The government has increased how much you can contribute to your IRA in 2019. You can now put $6000 a year into your IRA (or $7000 if you’re 50 or older). We offer traditional and Roth IRAs that offer high rates of return, and provide security in an unpredictable market. Why not put some of that tax refund aside for the future? That’s sure to be a better option than investing your tax return in scratch-off lottery tickets.
If you’re looking for other potential investment options, look no further than our Financial Advisor partner Dante Trimble with Strategic Investment Services, located at our Bettendorf branch. He can be reached at 563-355-3800 x7042 or firstname.lastname@example.org. Schedule a no-cost, no-obligation consultation with him to discuss your financial goals.