This Tax Season, Lincoln Financial Shares Latest Tax Trend Research and Expert Tips for Maximizing Returns
15 Avril 2024 - 3:00PM
Business Wire
Lincoln Financial’s recommendations can help
consumers leverage tax refunds for financial planning
Tax season is in full swing in the U.S., with many Americans
looking forward to their potential tax refunds. With 50% of U.S.
adults expecting to receive a tax refund this year, Lincoln
Financial Group (NYSE: LNC) conducted a comprehensive survey to
explore how they plan to allocate their tax refunds1 to help guide
informed financial decisions with long-term goals and needs in
mind. According to the survey data, the top two priorities for
Americans are saving for emergencies and paying down debt.1 On the
other hand, one of the less common ways that individuals are using
their tax refunds is by saving for retirement.1
“While it’s tempting to splurge on short-term indulgences when
that refund comes, it’s crucial to consider long-term financial
goals. Lincoln Financial supports customers in making informed
decisions and encourages them to prioritize financial wellness by
considering options like saving for emergencies, paying down debt
and investing in retirement,” says Aaron Moore, senior vice
president, Retirement Plan Services Institutional Sales &
Client Engagement at Lincoln Financial Group. “By taking a
proactive approach to managing tax refunds, individuals can lay the
groundwork for a more secure financial future.”
Saving for emergencies
The survey found that the most prevalent approach among U.S.
adults for spending tax refunds is to put the money into a savings
account for emergencies or unforeseen expenses. In fact, 40% of
U.S. adults reported that they would be allocating their tax
refunds to a savings account.1 Putting money into an emergency
savings fund can reinforce financial safety, especially during
times of uncertainty.
Paying down debt
Many Americans surveyed, particularly Millennial respondents
(47%), plan to use their tax refunds to reduce debt burdens.1 When
using a tax refund to pay down debt, individuals can go beyond the
usual monthly payment and designate an amount that exceeds the
minimum requirement. Debts with high interest rates should be
prioritized, as paying off these debts first can lessen interest
payments over time.
Additionally, those paying down debt can explore online
budgeting tools that provide insights on how to allocate tax
refunds. For example, Lincoln Financial offers a debt calculator
for those on the path to debt repayment. This debt calculator
allows individuals to model repaying a debt in a specific timeframe
or repaying a set amount.
Americans should seek advice from a financial professional to
best determine how tax refunds can be applied to a reasonable
repayment plan.
Save for retirement
Only 13% of surveyed Americans plan to put their tax refunds
towards their retirement savings, despite maximizing retirement
contributions being a sound decision for long-term financial
wellness.
Although tax returns can’t directly be contributed to
employer-sponsored 401(k)s, Americans can temporarily increase
their contributions and leverage their tax returns to compensate
for those additional dollars being designated for retirement. This
strategy allows individuals to boost their retirement savings and
benefit from the tax advantages associated with contributing to a
401(k) plan throughout the year.
Additionally, it’s important to note the available Saver’s
Credit through the Internal Revenue Service, which provides a tax
credit for eligible individuals contributing to an IRA or
employer-sponsored retirement plan. This credit can help reduce tax
liability and further incentivize retirement savings.
During this tax season, Lincoln Financial remains committed to
empowering individuals with the knowledge needed to make informed
financial decisions with their tax refunds. By prioritizing
emergency savings, debt repayment, and retirement planning,
Americans can embark on the journey towards a brighter financial
future.
1 Lincoln Financial, Consumer Sentiment Tracker, November
2023
About Lincoln Financial Group
Lincoln Financial Group helps people to plan, protect and retire
with confidence. As of December 31, 2023, approximately 17 million
customers trust our guidance and solutions across four core
businesses — annuities, life insurance, group protection, and
retirement plan services. As of December 31, 2023, the company had
$295 billion in end-of-period account balances, net of reinsurance.
Headquartered in Radnor, Pa., Lincoln Financial Group is the
marketing name for Lincoln National Corporation (NYSE: LNC) and its
affiliates. Learn more at LincolnFinancial.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20240415330828/en/
Media Ayanna Maxwell, Corporate Communications
ayanna.maxwell@lfg.com
Lincoln National (NYSE:LNC)
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