Whatever it takes to meaningfully move the needle.
Almost 13 percent of Americans plan to use the recent tax cut proceeds to increase retirement savings, and of those 48 percent believe they’ll be able to retire sooner.
Those are some of the findings of a recent survey from LendEDU, a website dedicated to coverage and commentary on the latest student loan and financial aid policy news.
Specifically, 55.3 percent of respondents are more confident in their financial futures as a result of the tax plan changes, and in a nod to financial wellness, 35.7 percent are using the tax savings to pay down debt.
Overall, “Americans’ monthly paychecks have increased by an average of $130.76 in February due to the new 2018 tax plan changes,” the site reports. “As a result, Americans are largely supportive of the plan and more financially confident.”
As LendEDU notes, as a result of the Tax Cuts and Jobs Act of 2017, the federal tax withholding tables changed on Jan. 11, 2018. As it was widely reported, the Department of the Treasury estimated that 90 percent of Americans who get a paycheck are likely to see more in take-home pay as a result.
“The bill was signed into law by President Trump on Dec. 22, 2017, and employers were asked to start using the new withholding tables no later than Feb. 15, 2018. Most Americans started to see the impact of the plan in their paychecks starting on Feb. 1.”
To quantify the financial impact of these changes, the site conducted an 11-question survey of 1,000 Americans who reported that their take-home paychecks have increased as a result of the tax plan changes.
Among their other findings:
- Take-home pay after taxes increased by 3.5 percent on average
- 9 percent of respondents are increasing luxury spending
- 3 percent of respondents reported a more positive sentiment towards President Trump
- 7 percent of respondents believe that the 2018 tax plan will strengthen the economy
The full report can be found here.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.