Well, I had a biopsy today because we found a lump. So maybe I’m not cancer free. But, this lump didn’t change any of my financial plans.
Let’s talk for a few minutes about one of the greatest gifts you can give your future self: a retirement fund.
It’s tax season and people are just itching to use their refund on something: a new car, a night out, vacation, debt payments, maybe. Do you know what I did with my refund? I opened up an IRA. Do you know what my Old Man did with his refund? He put it in an IRA that I asked him to open last year.
**Disclaimer: My refund is usually small but this year for a variety of reasons, it was much larger than I anticipated.**
Did you know that adding money to a traditional IRA can give you a larger refund (this was one of my reasons)? But just because you can get a bigger refund doesn’t mean a traditional IRA is the way to go. A Roth IRA won’t get you a bigger refund, but you won’t have to pay taxes on it later when you do retire. I encourage you to look at some online calculators to decide which is better for you.
For 2015, you can still contribute up to $5,500 to any IRA. I know you may not have that money in the bank, which is why I encourage anyone who doesn’t need to pay off a debt with their refund to put the money in an IRA. I use Vanguard because of their low fees.
I also encourage everyone to adjust their withholding to get a smaller refund because you do more with that money in your pocket every month than you can by giving the government a 0% interest loan.
So do your future self favor, use your refund to pay off a debt or save for your retirement account. You will appreciate it much more in the long run than a fancy television or vacation.