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So what are you doing with your tax refund?
This is the time of year when most people will receive tax refunds. Depending on the amount, it might be useful to compare some options. It’s certainly tempting to use your newly found riches on a toy or some item that falls within the price range of your refund. However, it makes sense to “do the math” before making a new purchase.
Let’s say you received a $2000 refund. Let’s also say you owe $10,000 on your car at 5% for 48 months. If you apply the $2,000 toward that balance, you would save an additional $210.81 in interest during the same loan period. You could also say it costs you $210.81 by NOT applying the $2000 to the loan.
Here is a different option. Save the money. There are some great resources available to provide some ideas including the American Institute of CPA’s www.feedthepig.org site or the Retirement & Investing link at www.nationwide.com. If we take your $2000 and invest it for 20 years, you will find yourself with a balance of $4382 at 4%. It could be said if you DON’T save the money; it will cost another $2382 over the next 20 years (just something to think about).
Barry A. Hunter CLU, ChFC has worked with Nationwide Financial for over 20 years. The local office address is 204 Court Street, Spencer WV 25276 and telephone number 304-519-5959.
Securities offered through Nationwide Securities, LLC., member FINRA, SIPC. DBA Nationwide Advisory Services, LLC. in AR, FL, IL, NY, TX and WY. Representative of Nationwide Life Insurance Company, affiliated companies and other companies.
Federal income tax laws are complex and subject to change. Neither Nationwide nor its representatives give legal or tax advice. Please consult your attorney or tax advisor for answers to specific questions.