9. Don’t blow your tax refund
Financial advisor Zaino asks what are you planning to do with your tax refund because “if you’re like most Americans, the world of instant gratification is beckoning. It could be extremely damaging to your retirement account, however, especially given the time value of money and what Albert Einstein called ‘The eighth wonder of the world”—compound interest.
“Based on last year’s data, the average refund should be about $2,800. Let’s say you save your money in a vehicle that earns you 6 percent annual interest and you have the discipline to continue to deposit $2,800 every year for the next 30 years. That would yield $250,726. At 7 percent, you’d have $304,319. That’s an EXTRA quarter-million dollars in YOUR retirement account—just for being disciplined and not blowing your refund.”
