Fund companies trying to encourage people to plow their tax refunds into retirement savings accounts such as IRAs will have some stiff competition from debt and everyday consumerism, according to a survey conducted by Visa USA.
Moreover, women are less likely than men to apply their refunds to savings, according to the survey of 1,007 Visa cardholders.
Among women between 18 and 49, 30% said they planned to save their refunds, while others said they planned to make a major purchase, use it to cover everyday expenses, or pay down existing debt. Among men in the same age range, on the other hand, 40% said they planned to save the refund.
After 50, though, the dynamic shifts, with women saving more often, with 48% of respondents in that category saying they plan to save their refunds, compared to 45% of their male counterparts.
Jason Alderman, director of Visa USA’s education program, said that stowing, rather than spending, refunds is critical to people’s financial health. “Taking advantage of tax refunds to save for retirement or a rainy day is vitally important,” he said.