Did you recently find out you are going to receive a tax refund? Did you immediately think about what you could spend the money on? Maybe the things you are planning on spending your tax refund on are constructive, like car repairs, home repairs, pay off some credit card debt or others. However, it’s hard not to be tempted to spend that refund money on something fun, right?
I know for the longest time, I would do just that with my tax return. I would use it to buy the newest “things.” While that does give us the most immediate satisfaction, I have come up with an idea about how we may be able to get the best of both worlds.
Instead of spending all of your refund on “things,” maybe we should spend it on ourselves. But, we aren’t spending the refund on ourselves today. Instead, we should spend it on our future selves. What I mean, is maybe we should pay ourselves for a future expenditure. That future expenditure may be a new car, our children’s education, or our retirement.
You may be thinking, why would I use my refund on my retirement when I have LAGERS? Well, as I have said in this previous post, you cannot rely entirely on your LAGERS’ benefit and Social Security for your retirement security needs. Instead, to reach fulfillment after working, you must also have a nest egg of savings to ensure your future financial security. The good news, a LAGERS member doesn’t have to save as much to ensure you reach retirement security because you have a secure benefit through LAGERS.
"Saving money you didn’t even know you had, may have a significant impact on your ability to reach financial independence when you want to leave the workforce."
Another reason why you might want to use your refund for a future event is until you filed your taxes, you didn’t miss the money. So, why not help yourself achieve financial security with the help of your LAGERS benefit and Social Security by saving it in a qualified retirement account. If you do it continuously on years you receive refund, you may be surprised what you are able to accumulate over time with consistent contributions and modest investment returns.
So, think about it. Saving money you didn’t even know you had, may have a significant impact on your ability to reach financial independence when you want to leave the workforce. I know, it won’t be as fun. But, imagine no longer being reliant on employment to meet your financial needs. That, will be pretty awesome if I do say so myself.