money matters

Americans Are Not Investing Their Annual Tax Refunds This Year

Majority of Americans are using 2016 tax refunds to pay off “necessary” expenses

ST. LOUIS, May 5, 2017 /PRNewswire/ — According to a recent study from Edward Jones, only 6 percent of Americans are planning to invest their 2016 tax refunds this year.

The study, which surveyed 1004 respondents across generations, regions and income levels, found that the majority of Americans (53 percent) plan to put their tax refund towards necessary expenses, such as student loans and credit card payments.

“U.S. stocks are up this year, helped by modest economic growth and stronger company profits. We think those will continue to support rising stock prices over time,” said Kate Warne, Principal and Investment Strategist at Edward Jones. “By investing now, Americans can put money to work in support of both their short- and long-term goals.”

According to the study, 31 percent of respondents plan to save their refund and the remaining 9 percent plan to put it towards something fun, like a vacation or entertainment. When examining the generational differences, Millennials were most likely to save their tax refunds, with 33 percent indicating so, followed by Baby Boomers (31 percent) and Gen Xers (26 percent). At the same time, Baby Boomers were most likely to spend their tax refunds on fun expenses (15 percent), followed by Millennials (9 percent) and Gen Xers (6 percent).

Paying Down Debt

“Using the refund to pay down debt with higher interest rates, such as credit cards and student loans, is certainly recommended to help get your finances in order. But don’t focus exclusively on the short-term. The refund can be a great way to increase how much you are investing toward retirement to get your retirement strategy back on track as well,” said Scott Thoma, Principal and Retirement Strategist at Edward Jones.

Other findings from the study show that the presence of children in a household affected respondents’ allocations. Sixty-six percent of families with children chose to spend the majority of their tax refunds on necessary expenses. For those without children, only 46 percent indicated they would allocate the money to these costs.




This survey was conducted by ORC International’s Telephone CARAVAN® Omnibus on behalf of Edward Jones. The survey was conducted among a nationally representative sample of 1004 respondents from April 20-23, 2017.
About Edward Jones
Edward Jones, a FORTUNE 500 firm, provides financial services for individual investors in the United States and, through its affiliate, in Canada. Every aspect of the firm’s business, from the types of investment options offered to the location of branch offices, is designed to cater to individual investors in the communities in which they live and work. The firm’s 15,000-plus financial advisors work directly with more than 7 million clients. Edward Jones, which ranked No. 5 on FORTUNE magazine’s “100 Best Companies to Work For 2017,” is headquartered in St. Louis. The Edward Jones Web site is located at and its recruiting Web site is Follow Edward Jones on Twitter @EdwardJones and visit the firm’s Facebook site at Member SIPC.