Finally Start Saving for Retirement With a Tax Refund
If your company doesn’t offer 401 (k), it’s fairly easy to start investing on your own. It takes one small step: opening an Individual Retirement Account (IRA). If you’re putting it off, use your tax refund as your motivation.
At NPR, behavioral economist and Harvard professor Bridget Madrian says procrastination is the biggest mistake people make when it comes to investing. And while it’s easy to get started , most people don’t have time to open an account because there is no deadline.
She suggests setting your own deadline:
Madrian says there are good ways to push themselves to create a good retirement account … Madrian says people need to make a plan about when they are going to open an IRA or Roth IRA, for example, and how exactly they are going to do it. Telling your friends about it also creates a certain social pressure. Research shows that this increases your chances of success.
She suggests taking all or half of your tax refund when it comes to opening your first retirement account – or, for that matter, your first 529 college savings plan . Madrian says it’s a great way to have a deadline plan.
Sure, this assumes you get your tax refund in the first place, but that’s decent enough advice if you do, because it gives you a due date and has a savings plan built in. Check out the full NPR report below for more details.
How to start saving? Your Tax Refund May Be The Answer | NPR