Nearly six in 10 Canadians (57%) expect to receive a tax refund this year, according to a TD survey. Of those anticipating a refund, 61% expect to receive up to $1,499.
The survey also revealed that the top three financial goals for Canadians include paying off credit card debt (32%), contributing to an RRSP or TFSA (31%), and adding to their emergency fund (28%).
Read: Think clients know their tax rates? Check again
Here are some tips from TD to help clients in various life stages decide what to do with their refunds.
- Post-secondary graduates
- Consider a lump sum payment on student loans or credit card debt.
- Starting a new job? Contribute to a high-interest savings account to help cover the cost of your first vacation away from the office.
- Employees
- Does your employer offer an RSP matching contribution program? If so, allocate as much of your refund as it takes to maximize your employer’s contributions.
- Invest your return towards a professional development course to further your career.
- Grow your portfolio through a range of products like mutual funds, GICs and term deposits.
- Property investors
- Whether you’re a first-time buyer or looking to invest in a family cottage, use your refund to build a larger down payment on your dream property.
- Already a homeowner? Consider a lump payment against your mortgage. Even an extra $1,500 can save substantial interest over the lifetime of a mortgage.
- Contribute to a TFSA to save for unexpected housing costs, like roof repairs or plumbing issues.
- Parents
- Contribute to your child’s RESP, taking advantage of compound interest and government matching grant programs that may be available to you.
- Make planning for an upcoming parental leave less financially stressful by contributing your refund to a high-interest savings account.
- Pre-retirees
- Get a head start on 2016 and make a contribution to your RRSP. The amount contributed can also be claimed as a tax deduction on next year’s tax return stretching the dollars even further.
- Consider how you want to spend your retirement years – if it’s mastering a new skill or pursuing a new hobby, put money aside now to fund those activities later.