Using Tax Refunds to Increase Savings and Retirement Security

Jan 01, 2006

Allowing households to split their refunds could make saving simpler and, thus, more likely. Since federal income tax refunds total nearly $230 billion a year (more than twice the estimated annual aggregate amount of net personal saving in the United States), even a modest increase in the proportion of refunds saved every year could bring about a significant increase in savings.

This policy brief explores the important potential of refund splitting to expand savings and discusses the obstacles and practical steps needed to make the splitting of tax refunds a reality.

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