Workers who earn less than $75,000 a year, have likely already seen an adjustment to tax withholding in their paycheck that gives them an extra $45 or so ($65 for married workers) per month.1
Primerica, a financial services industry leader, presents three ideas for maximizing the stimulus refund.
- Boost an emergency fund. Nearly 50% of Americans say they’d be insolvent in one or two months if they lost their job.2 That’s a scary statistic in a time of high unemployment. Primerica suggests clients try to save at least six months’ worth of expenses so they won’t have to touch retirement accounts or home equity in the event of an emergency.
- Pay down high‑interest credit card debt. This is the best investment a family can make right now. If a card holder is paying 19% in interest, eliminating that debt is like giving themself a 19% return on their money!
- Direct deposit the refund for the future. The IRS now allows people to take advantage of direct depositing their tax refund directly into an IRA. Instead of spending the refund, it’s a great idea to put that refund “to work.” Clients can contribute up to $5,000 in 2009 and $6,000 if they are age 50 or above.3
For more money‑maximizing tips, visit How Money Works.
- Kiplinger’s, June 2009. The stimulus begins to phase out for single filers who earn $75,000, disappearing entirely at $95,000. For married couples filing jointly, the phase‑out starts at $150,000 and ends at $190,000.
- Money, April 2009
- Contributions limits for Roth IRA are subject to reduction and may be phased out based on individual’s adjusted gross income (AGI). Consult your tax advisor with any questions regarding your situation.
Securities offered by PFS Investments Inc. 3120 Breckenridge Blvd. Duluth, GA 30099