Make Your Tax Refund Count

Apr 5 • Financial Planning, Retirement Planning • 1742 Views • No Comments on Make Your Tax Refund Count

By Matt Starkey

If you are like most business executives, it feels good to get money back when you file your tax return.  Just like finding that $20 bill in your winter coat pocket from last year, you are free to spend this unexpected bonus however you want.  Many people immediately start thinking about spending this new found cash on a vacation or purchasing some new clothes.

While these purchases may provide some short-term gratification, saving this unexpected windfall for retirement can boost your retirement savings and financial plan, perhaps more than you thought possible.  What if you can increase your refund by ten-fold?

Let’s say for example that you received a $5,000 tax refund this year.  Instead of booking that trip to Cabo or immediately jumping on Amazon, assume you invest the cash into an investment portfolio that returns eight percent over each of the next 30 years.  This $5,000 windfall would turn into more than $50,000!  That extra boost could really help when it comes time to transition to retirement.

Let’s take the example above just a little further.  Assume you invest your $5,000 tax refund every year instead of spending it.  After 30 years assuming an eight percent return, you would have $566,000 of additional assets.

As you can see, being thoughtful about how you deploy that new found cash at tax filing time can really pay off when it comes to your financial plan and when you transition to retirement.

For help building a personalized financial plan, schedule a meeting by clicking below, contact Matt Starkey –, or call (913) 345-1881.

Photo credit: / Foter / CC BY-SA


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