Your Tax Refund is Here – Now What? Smart Ways to Make it Count.
Ever Wonder Why You Get A Tax Refund?
A tax refund simply means you paid more in taxes during the year than you actually owed. Your employer withholds a portion of each paycheck to cover your expected income taxes — if they withhold too much, the extra comes back to you at tax time.
Should You Aim to Get a Tax Refund?
Most people enjoy getting a tax refund, but here’s the surprising truth: a refund means you paid more in withholding during the year than you actually owed. In other words, you’ve basically been giving the government an interest-free loan with your money.
Ideally, your goal should be to break even at tax time — not getting a large refund and not owning a big bill. This means your tax withholding is set just right for your situation.
Did You Know in 20251
- The IRS processed more than 165 million individual income tax returns
- About 104 million taxpayers (63%) received refunds
- The average refund was $3,167
Expecting a Tax Refund this Year? Make It Work for You.
Your tax refund is more than “extra money.” It’s an opportunity to make meaningful financial progress — whatever your goals may be. Here are some smart ways to consider putting it to work for you:
1. Protect Your Financial Foundation
Your financial future begins with the basics. Consider using part of your refund to reinforce the protection and stability your family relies on.
Help take care of your family’s future.
Use a portion of your refund to buy or maintain life insurance. It helps protect loved ones, cover final expenses, and leave a legacy.
Build or boost your emergency fund.
A cash cushion helps to prepare you for life’s surprises — car repairs, appliance breakdowns, or an unexpected bill. An emergency fund can help prevent reliance on credit cards or loans when surprises you’re your way.
Plan for home repairs or improvements.
Setting aside money now can help you handle repairs or even invest in energy‑efficient upgrades that may lower utility bills.
2. Build Your Long‑Term Wealth
Your refund can do more than help today — put it toward your future. Many people use their refund to enhance savings, invest strategically, or increase retirement contributions.
Save for your child’s education.
Even modest contributions can reduce the need for student loans later and help build a brighter future.
Plan for your child’s future.
You could use part of your refund to buy a life insurance policy for your child. As they grow, the policy may grow too – building value they may potentially be able to use later in life.
Supplement your retirement with an annuity.
Consider adding to an existing annuity or opening one. Annuities can offer guaranteed income — often for life — and your earnings grow tax‑deferred, potentially helping your savings last longer.
3. Ease Your Financial Stress
Use your tax refund as a springboard to help relieve financial pressure and enhance your earning potential.
Pay down high‑interest debt.
Lowering credit card balances early means paying less interest. Just make sure extra payments reduce your principal balance, not just next month’s payment.
Catch up on overdue bills.
Bringing overdue bills current can help you regain control and reduce stress.
Invest in yourself.
Use part of your refund for courses, certifications, or professional development. Growing your skills can help increase your earning potential.
And yes, treat yourself. Whether it’s something fun or something that helps you grow, you deserve a little joy. Taking care of your own happiness matters too.
You Can Do This
Your tax refund can be a great opportunity to strengthen your financial well‑being. If you’re unsure where to start, meeting with a financial professional can help you make choices that balance tomorrow’s priorities with today’s happiness.
If you are interested in talking about annuities and life insurance, please reach out to National Life Group to get the conversation started.
Margaret A. Muldoon, J.D., LL.M.
Margaret (Meg) Muldoon is an attorney with the Advanced Sales Team. Meg has spent her career guiding individuals and financial service professionals through asset distribution and estate planning process.
In her position at National Life Group, she offers comprehensive case design, technical, marketing, and educational support to National Life Group’s field partners, agents, and associates on matters pertaining to estate, charitable, executive benefit, and business planning. She does not practice law on behalf of National Life Group.
Meg possesses a J.D., an LL.M. in taxation, and a B.S. in Business Administration and related experience as an attorney in the financial services industry and in private practice. She was also an adjunct professor at Suffolk University Law School. She is a member of the State Bar of Massachusetts and is admitted to practice before the United States Supreme Court.