Did you receive a tax refund?

tax refund     It is always better to receive a small refund than pay penalties for not having paid enough during the year. How much is enough?
A tax refund is nothing more than an interest free loan by you to the government. If you are using this as a forced savings program, you are gaining no interest on your money. Your money is safe however, you lose buying power! Yes, inflation is still happening but your money is gaining nothing.
What is the smart move with your refund? First, make sure you have an adequate emergency fund. You know your job security, anticipated repairs and expenses, a vacation. Always have enough in a liquid account so you don’t have to borrow for emergencies.
Once you have the emergency fund, start or add to your ROTH IRA. You have already paid the taxes on your money, so get it working for you tax free. That is right. With a ROTH, you pay the tax up front and then your contribution and the earnings grow tax free. And you take out the money tax free. I would rather pay the tax now on the small contribution than on the contribution and the earnings! If you are in the 25% tax bracket, you just gave yourself quite a raise in retirement income.
Have you maxed out your ROTH contribution? Cash Value Life Insurance grows tax free like a ROTH without the $ restrictions. And you can take out “loans” which are never taxed. Sound too good to be true? Ask me. I can explain your options and help you decide which option work best for you.

Did you receive a tax refund?
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