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40% of U.S. workers have saved
less than $25,000 for retirement.*

*2019 Retirement
Confidence Survey, EBRI

Only 42% of Americans know how
much money to save for retirement.*

*2019 Retirement Confidence Survey, EBRI

43% of retirees left
the workforce earlier
than planned.*

*2019 Retirement
Confidence Survey, EBRI

It’s Your Money: Why Not Get Your Tax Withholding Right?

The IRS issued about 95 million federal income tax refunds by May 12, 2023 (for tax year 2022), averaging $2,812.1 You might consider this type of windfall a stroke of good fortune, but is it really? You probably wouldn’t pay someone $234 each month to receive $2,812 back at the end of a year. But that’s essentially what a tax refund is — the repayment of your interest-free loan to the government.



If you received a large refund on your 2022 return, consider reducing your federal income tax withholding, which would leave you with a bigger paycheck. Taking home more of your pay may let you put that money to better use. For example, you may be able to pay off credit-card debt sooner, build up your emergency savings, or contribute more to a retirement account. If your tax bill was higher than you expected and you had to scramble for the money to pay it, bumping up your withholding might help you avoid a similar situation next April.

In any case, it’s a good idea to check your withholding periodically. This is particularly important when something changes in your life; for example, if you move, get married, divorce, or have a child; you or your spouse change jobs; or your financial situation changes significantly. The IRS has an online tool (the Tax Withholding Estimator) that can help you determine whether — and how much — to adjust your withholding.


Federal Tax Brackets for 2023

Marginal tax rate: Single taxpayers: 10%: Income up to $11,000, 12%: $11,001 to $44,725, 22%: $44,726 to $95,375, 24%: $95,376 to $182,100, 32%: $182,101 to $231,250, 35%: $231,251 to $578,125, 37%: income over $578,125. Married couples filing jointly: 10%: income up to $22,000; 12%: $22,001 to $89,450; 22%: $89,451 to $190,750; 24%: $190,751 to $364,200; 32%: $364,201 to $462,500; 35%: $462,501 to $693,750; income over $693,750.


The amount of federal income tax withheld from each paycheck is based on the information on your W-4 Form, which may have been filled out a long time ago. If you decide to make an adjustment, you will need to complete a new W-4 and submit it to your employer.