The average U.S. tax refund for individual filers reached $3,275 as of April 17, 2025, an 11.3% increase from $2,942 a year earlier, according to IRS data. The boost reflects new deductions introduced under the One Big Beautiful Bill Act, including breaks for tip income, overtime pay, auto loan interest, and seniors. Yet a new survey from online retirement provider PensionBee suggests that higher refunds do not automatically lead to better financial outcomes.
PensionBee surveyed 1,000 U.S. adults who received refunds in the 2025 tax year, releasing findings on April 22. Nearly one in four respondents—23%—expressed regret about how they used last year's refund. Among those with regrets, 57% wished they had saved or invested more. The survey highlights a recurring pattern: short-term spending pressures routinely override long-term financial goals.
The intention-reality gap is most pronounced around savings and retirement. While 13% of respondents plan to build an emergency fund with their 2026 refund, only 6% actually did so last year. Similarly, 9% intend to direct their 2026 refund toward retirement savings, but just 6% followed through in 2025. Everyday spending consumed a larger share than planned: 35% used their last refund for day-to-day costs, versus 29% who had intended to. PensionBee attributed part of the gap to consumer prices rising 24.3% since January 2021.
“Competing financial priorities often shift our focus to the present moment,” said Romi Savova, founder and CEO of PensionBee. “It can be worth setting concrete plans that are realistic enough to account for immediate curveballs while still ensuring long-term goals remain in view.”
Younger generations feel the sting of regret most acutely. Gen Z respondents were three times more likely than Baby Boomers to say they plan to use their 2026 refund differently than last year. While 68% of Baby Boomers expressed confidence in their 2025 refund decisions, only 47% of Gen Z and 48% of Millennials said the same. The data aligns with a separate April survey of 2,000 Gen Z and Millennial adults by Beyond Finance and Operation HOPE, which found that nearly 45% would use a tax refund to cover bills or pay down debt, while less than 4% would spend it on travel or leisure.
The joint survey also revealed that 59% of respondents feel spending on meaningful experiences today is more practical than saving for long-term goals that seem increasingly out of reach, and 65% are uncertain whether traditional retirement planning will deliver real security. For advisors, these findings underscore the challenge of helping clients resist short-term temptations, especially when refunds are larger than usual.
Not all areas showed a gap. The share of respondents planning to invest through a brokerage account (5%) matched exactly those who did so. Debt repayment held fairly steady: 26% planned to pay down debt, while 28% ultimately did. And 15% both planned to and did treat themselves. The survey also notes that IRA contributions made before the April filing deadline can reduce taxable income for the prior year—a consideration that may carry more weight in years when refunds are higher.
For financial advisors, the PensionBee data points to a narrow but recurring window of opportunity. As Savova noted, “for those who can set even a portion aside, the long-term payoff is real, and the regret of not doing so tends to arrive sooner than people expect.” Advisors may find it useful to discuss concrete allocation plans with clients before refunds arrive, particularly for younger clients who are most prone to regret. Related research, such as the Gallup and Ameriprise surveys on retirement anxiety, and the Northwestern Mutual and Guardian surveys on the gap between optimism and readiness, reinforce the importance of proactive planning.
