Millennials versus baby boomers (and vice versa): It seems like a feud of stereotypes destined to live in infamy for ages. Many of the classics — pervading opinions like “Millennials are entitled and lazy” and “Boomers won’t ever catch up with modern technology” — have already been debunked by psychiatrists and psychologists who specialize in the field of aging in the workforce.
Generation gaps aside, there’s at least one thing working adults from all ages and walks of life have in common: taxes.
Tax time means stress, hassle, and headaches, right? Well, with the advent of simple DIY filing software, maybe that’s not true for everyone — but it’s still certainly not on anyone’s list of “My Top Five Favorite Things to Do Every Year.” In any case, the first word that typically comes to mind when you mention “filing taxes” is “refund.” Hopefully a big one. Because who doesn’t love scoring a huge chunk of change from the government every year?
The fact is that a heftier refund isn’t a good thing. All of that cash you get after you file is money you’ve already earned, and you were entitled to enjoy it well before the IRS finally gave it back. The bigger your refund, the more you loaned Uncle Sam throughout the year — and that loan doesn’t pay out any interest.
One of the reasons that some baby boomers tend to look forward to a sizable refund is simple: They’re statistically less likely to update their withholdings to keep up with changing tax laws, so they’re accustomed to seeing a big sum of money every year after they file. Members of this generation are also more prone to making special plans for that undetermined, “surprise” amount come filing time, including:
Travel and experiential living
While many boomers are already on the cusp of retirement — or have already taken that step into freedom from the grind — many aren’t quite ready to settle down just yet. This age group spends more than $120 billion annually on travel and leisurely activities— enjoying the good things in life after a lengthy period of hard work and saving. That extra refund “bonus” is often the catalyst for an impromptu week-long getaway, and why not?
Wining and dining
To continue the trend of treating themselves to life’s niceties, more and more boomers are interested in spending their money on higher-quality booze and clean eating. We all know that organic greens and carefully crafted wines aren’t cheap, but 62 percent of those aged 51 to 69 try to cook a nutritious meal at home every day. It turns out that the unexpected generation driving this frenzy of healthier food isn’t the kale-obsessed millennials after all — it’s their parents.
Switching to streaming subscriptions for shows and movies may be all the rage with the younger generation, but many boomers are still holding steadfastly to their satellite and cable services. According to a survey conducted by Gallup, approximately 40 percent of this generation would prefer to spend more money on old-school methods of watching TV than cut the cord and go the online route.
Supporting their children
Not every boomer is looking to throw their refund into a cross-country trip or a lifetime subscription to farm-fresh meal deliveries. In fact, many choose to continue providing their millennial children with support well after they’ve flown the coop. For some, this means delaying their retirement, but you won’t find many who will admit to regretting their decision. In fact, 95 percent of those polled in the 55 to 64 age category stated that they had zero regrets when it came to the way they spent their last refund.
While the majority of baby boomers (and American taxpayers in general) still prefer to see a big refund upon filing their federal returns, some say that breaking even with the IRS — seeing a zero-dollar balance owed — is better, because then they know they didn’t overpay all year. What’s your stance?
Get the conversation started on TaxAct’s social media pages and let us know what you think. We look forward to hearing from you — all generations are welcome here.