Schwab Helps Americans Make the Most of Tax Refunds

Encourages Investors to Use Cash to Support Long-term Financial Goals, Pay Down Debt

Thursday, April 8, 2010 12:03 pm PDT



Public Company Information:

"While new electronics and vacations are tempting, we encourage our clients to use refunds to support longer-term financial goals"

SAN FRANCISCO--(BUSINESS WIRE)--As the tax deadline approaches and refunds arrive, Charles Schwab & Co., Inc. recommends that investors take stock of their finances to ensure the full benefits of returns are realized.

“While new electronics and vacations are tempting, we encourage our clients to use refunds to support longer-term financial goals,” said Kim Segal, financial consultant in Schwab’s Boston branch. “Particularly in today’s economic environment, it’s important for investors to maximize the impact of this influx of cash by paying down debt or growing an emergency fund.”

For those receiving a tax refund this year, Segal has four tips to help make the most of it:

  1. Pay down high-interest debt. Committing refund money to paying down debt will make it much easier to reach savings goals. To increase savings, create a budget and look for ways to cut back on non-essential expenses. More information on how to pay down nondeductible debt can be found here through
  2. Establish an emergency fund. Without an emergency fund, Americans are at risk of dipping into retirement savings or taking on more debt if they need quick access to cash. You should save enough to cover three to six months of essential living expenses. Use the refund to create an emergency savings fund that is also easy to access when you need the cash. Learn how to build an emergency fund here through
  3. Maximize retirement savings. Now more than ever, individuals are responsible for their own retirement security. Use the refund to jumpstart your retirement savings by contributing to a traditional or Roth IRA. Remember, those over 50 can also take advantage of catch-up provisions that allow investors to contribute an additional $1,000 to an IRA. Additionally, 401(k) plan participants who are recently unemployed, changing jobs or retiring, can roll retirement savings from an old employer’s retirement plan into an IRA and maintain the tax-deferred savings status and avoid penalties. To help decide which IRA is right for you, visit
  4. Invest in a college fund. College savings accounts such as a state-sponsored 529 plans offer tax-free investment growth potential as long as withdrawals are used for qualified education expenses. To get started on college saving, visit

For more detailed information on the Savings Fundamentals and for links for interactive calculators and educational content, please visit And for more information on how saving and investing can add up over time, as well as what it takes to pay off debt, visit the calculators at

As with any investment, it’s possible to lose money by investing in a 529 plan. Additionally, by investing in a 529 plan outside of your state, you may lose tax benefits offered by your own state’s plan.

About Charles Schwab

The Charles Schwab Corporation (NYSE:SCHW) is a leading provider of financial services, with more than 300 offices and 7.8 million client brokerage accounts, 1.5 million corporate retirement plan participants, 753,000 banking accounts, and $1.4 trillion in client assets. Through its operating subsidiaries, the company provides a full range of securities brokerage, banking, money management and financial advisory services to individual investors and independent investment advisors. Named "Highest in Investor Satisfaction with Self-Directed Services" by J.D. Power and Associates in 2009, its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC,, and affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; referrals to independent fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through its Advisor Services. Its banking subsidiary, Charles Schwab Bank (member FDIC and an Equal Housing Lender), provides banking and mortgage services and products. More information is available at (0410-2179)


Charles Schwab
Matt Hurwitz, 415-667-0480
Edelman Public Relations
Pablo Rodriguez, 415-486-3226

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