04-11-19 Columns

What can you do with your tax refund? We’re getting close to the tax-filing deadline. For many of us, this means it’s that time of year when we get our biggest financial windfall – a tax refund. If you have recently received a refund, or are expecting to get one in the next few weeks, what should you do with it? Of course, you could just spend the money on something you want, but if you’d like to maximize the financial benefits from your refund, you might want to consider other options, including the following: Invest the money. In 2018, the average tax refund was about $2,700. For this year, it might be somewhat lower, due to changes in the tax laws and the failure of taxpayers to adjust their withholdings in response. However, if you were to receive in the neighborhood of $2,700, you’d be almost halfway to the annual IRA contribution limit, which, in 2019, is $6,000. (If you’re 50 or older, you can put in up to $7,000). If you have already “maxed out” on your IRA, you could use your refund to fill in gaps you may have in other parts of your investment portfolio. Pay insurance premiums. Let’s face it – nobody really likes paying insurance premiums. Yet, if you have anyone depending on you, you will certainly need life insurance, and possibly disability insurance as well. And if you want to help protect your financial resources later in life from threats such as an extended – and hugely expensive – stay in a nursing home, you also may want to consider long-term care insurance. Your tax refund could help pay for some of these premiums, boosting your cash flow during the months you would normally be making these payments. Contribute to a college fund. It’s never too soon to begin saving for college, which has grown increasingly expensive over the last several years. So, if you have young children, you may want to think about investing some or all of your refund into a college-savings account, such as a tax-advantaged 529 plan. Pay off debts. You might be able to use your refund to pay down some debts – or perhaps even pay off some of your smaller ones. The lower your monthly debt load, the more money you will have available to invest for the future. Keep in mind, though, that you might not want to look at all debts in the same way. For example, putting extra money toward your mortgage might help you pay it off faster, but you’ll also be funding an asset – namely, your house – that might not provide you with the same liquidity as you can get from investments such as stocks and bonds. Help build an emergency fund. By building an emergency fund containing six to 12 months’ worth of living expenses, you can help yourself avoid dipping into your long-term investments to pay for large, unplanned-for bills, such as a major car repair or an expensive dental procedure. Your tax refund could help build such a fund, with the money ideally being placed in low-risk, liquid vehicles. Clearly, you can help yourself make progress toward a number of your financial goals with your tax refund – so put it to good use. This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

Protecting our seniors Our senior citizens have given so much to our community, state, and nation, and for that, we are eternally grateful. In recent years, senior citizens have increasingly become the targets of scammers, and people who see them as easy targets for abuse or neglect. To help fight back and protect our aging loved ones, I was pleased to see the Attorney General announce the creation of the bipartisan Michigan Elder Abuse Task Force. This panel will include representation from more than 30 different organizations, including law enforcement, state agencies, the Michigan House, Senate and Congressional delegation, and advocacy groups. The task force is expected to address a wide variety of issues, including protecting vulnerable adults from undue influence, increasing maximum penalties for abusers, creating a special prosecutor for elder abuse, requiring mandatory reporting of deaths in facilities caring for vulnerable adults, and developing local level multi-disciplinary elder abuse community investigation teams. In addition to this task force, there is a bipartisan group of representatives that have come together to combat elder abuse and increase protections for Michigan’s senior population. The eight-bill bipartisan plan will add legal protections for adults age 65 and older and establish increased criminal penalties for individuals who financially or physically abuse vulnerable and older adults. Elder abuse is a serious crime. The abuse or neglect of any one of our seniors diminishes all of us. These additional protections and increased criminal penalties will ensure people think twice before targeting or taking advantage of older adults. I understand that this office belongs to the hard-working people of Southwest Michigan, and I am always eager to hear your feedback. You can reach me via email at PaulineWendzel@house. mi.gov, or by phone at 517-373-1403. You can also follow my Facebook page at @RepWendzel or visit my website at www.repwendzel.com.

Work zone safety starts with us With the warmer months fast approaching, the Michigan Department of Transportation is reminding motorists to be on the lookout for orange barrels and to drive safely through construction zones as crews work to fix our roads. This week, in an effort to highlight work zone safety during National Work Zone Safety Awareness Week, MDOT is encouraging people to wear orange and to s