Key Takeaways

• A tax refund is your own money being returned to you; it’s not found money
• Over paying your taxes can result in a large refund, but it also gives the government an interest-free loan when you could be earning interest or growing that money elsewhere
• You can put your refund to work for long-term gain by prioritizing smart investments like retirement savings over splurges
• Tax accountants and financial advisors serve different purposes; both can help you navigate tax season and beyond

Every year, millions of Americans check their tax return, see a refund waiting for them, and feel a rush of excitement. It feels like found money: a reward for getting through another tax season. And almost immediately, the mental spending begins.

Maybe a new TV. A vacation that’s been on the back burner. A few splurges that feel justifiable because the influx of money appeared out of nowhere.

But in reality, that money was yours the whole time.

The shift of understanding these funds as your own money returned to you, rather than a lucky windfall, lays the foundation for making smarter financial decisions in general, not just at tax time.

More Money Back Isn’t Always Better

This may surprise you, but a large tax refund may be a sign that something is slightly off in your financial picture.

When you receive a refund, it means you overpaid your taxes throughout the year, either through paycheck withholding or quarterly estimates. The government held that money, used it, and handed it back with no interest. In effect, you gave the federal government an interest-free loan.

However, that’s not necessarily a problem to be solved. Some people do it intentionally as a forced savings mechanism, and there’s nothing wrong with that if it works for you. But it’s worth understanding what you’re giving up.

A few thousand dollars sitting with the IRS from January through April isn’t earning anything. Invested or even sitting in a high-yield savings account, that same money could have been quietly working for you, growing over years.

The goal most financial professionals point toward is breaking even, getting a small refund, or owing a small amount. That’s a sign that your money is staying in your hands and, ideally, being put to use throughout the year, not parked where it earns you nothing.

A couple hundred dollars in either direction isn’t something to lose sleep over. But if you’re consistently seeing refunds in the thousands, it’s worth a conversation about your withholding.

Pause Before You Spend

If you’ve already received a refund or are expecting one, there are two questions worth asking before you do anything with it.

Does this refund make sense?

If your income is relatively consistent year over year and your refund is dramatically larger or smaller than usual, pause and examine why. A major life event like marriage, a new dependent, a job change, or a significant investment can shift your tax picture considerably. But if nothing like that has occurred and the number seems off, take a closer look and talk with your accountant before assuming a larger-than-usual refund is just good news.

What’s the best use of this money?

This is where most people skip a step. The refund arrives, the account balance goes up, and the money dissolves into everyday spending over the next few weeks. 

The wisest move is to be intentional and treat this money the way you’d treat any meaningful financial decision. Could it go toward:

• Retirement savings? 
• A home improvement that adds long-term value? 
• A college fund for your kids? 
• Estate planning you’ve been meaning to address?

Consider the benefits of those long-term investments if you’re inclined to use your refund on a shopping spree.

How to Make Your Refund (and Future Refunds) Work Harder

Being intentional here means thinking about what to do not only with this refund, but also how to set yourself up for success in the future.

Contribute to a Retirement Account

Funding a traditional IRA with your refund can reduce your taxable income, helping to generate an even larger refund next year while compounding retirement savings. Or if you’d rather grow money tax-free, a Roth IRA is worth considering. Either way, you’re turning a one-time return into potentially long-term financial growth.

Revisit Your W-4 Withholding

If your refund is consistently large, adjusting your withholding means more money in each paycheck throughout the year. That monthly increase can be redirected toward a higher 401(k) contribution, a life insurance premium, or simply a slightly higher monthly cash flow that doesn’t require you to wait for a lump sum once a year.

Using Your Refund for Next Year’s Taxes

This approach generally just produces another refund next year. It’s not usually the most efficient or cost-effective move. If you have a specific reason to explore it though, an accountant can walk you through whether it makes sense for your situation.

Special Considerations for Independent Contractors

If you’re self-employed or have significant 1099 income, the whole equation works differently. Managing quarterly estimates carefully with the help of an accountant is one of the most straightforward ways to avoid penalties and keep your tax picture clean.

Tax Season is More Than a Deadline

Many people have anxiety around tax season. Regardless of your feelings around it, it’s a timely moment to take stock of your financial health. It forces a holistic look at your income, withholding, savings, and life changes. Reflecting on your entire financial picture can also be useful to determine whether your current approach is still the right one.

Two professionals can help you navigate this:

• A tax accountant is focused on the numbers. How much do you owe? Are your filings accurate? Are you positioned correctly given this year’s tax law? Their job is to get it right, especially during tax season.
• A financial advisor is focused on strategy. Where should this money go? How do you reduce your tax liability going forward? Are you close to the edge of a tax bracket? Could a Roth conversion make sense? What does your overall financial picture look like, and is it still aligned with where you want to go?

Tax season doesn’t have to be something to get through. With a little intentionality and guidance, it can be a timely check-in and provide you financial peace of mind.
If you think your refund could be working harder for you, Premier Financial Group can help. One of our experienced advisors will discuss your current financial situation, understand your goals, and walk you through the best options.

Over the past year alone, the price of gold has climbed roughly 73%. Moves like this tend to get investors’ attention and raise a natural question: Should precious metals be part of a financial plan?

The answer, like many things in investing, is nuanced. Precious metals can play a meaningful role in a well-constructed portfolio, but only when you understand what they actually are, what drives their value, and where they realistically fit. 

First, a quick definition: Precious metals are natural metallic elements that are rare, durable, and have historically held economic value. The most widely known are gold and silver, but they also include platinum and palladium. 

Here’s what else you need to know.

What Drives the Value of Precious Metals?

At the core, precious metals rise when people lose confidence in the purchasing power of their currency. Any government can print money, but no government can manufacture gold or silver. That scarcity is the foundation of their value, and it’s a dynamic that has held for thousands of years.

The more money a government prints, the less each dollar is worth. Gold and silver have historically moved in the opposite direction. So rather than thinking of them like a stock you’re hoping will grow, think of them as a safeguard that holds its ground while paper money loses value.

Beyond currency concerns, supply and demand also shape prices, especially in the short term. Silver is a good example. Demand has grown steadily as it’s become a key material in batteries and electronics. But mining hasn’t kept pace. So the shortfall has been covered by tapping into existing stockpiles. That’s a short-term fix, and tightening supply tends to push prices up. Fear-driven events, like the Silicon Valley Bank collapse in 2023, can also create short-term spikes in precious metals premiums as investors seek safety.

The Role of Precious Metals in Your Portfolio

Precious metals are commodities, which behave differently from stocks or bonds. An ounce of gold mined in China is identical to an ounce mined in Nevada; there’s no brand, management team, or earnings growth. Because of this, precious metals don’t correlate perfectly with equities, and that diversification is why they’re valuable in a portfolio.

That said, it’s important to be clear about what precious metals don’t do. Unlike a stock, gold produces no earnings. It pays no dividend. It doesn’t grow. Over long periods like 50 to 100 years, gold and silver tend to track inflation fairly closely, historically around 3% to 4% annually. By comparison, equities have historically returned closer to 10–12% annually.

For most investors, this means precious metals should represent a relatively small slice of an overall portfolio; typically less than 10%. The right allocation depends on your personal goals, your concern about inflation, and whatever inflation hedges you already have (like real estate, for example). It’s also worth noting that a diversified stock portfolio already includes indirect exposure to precious metals through mining companies whose stock values are tied in part to the metals they hold in reserve.

Common Pitfalls

Investing in precious metals comes with a learning curve, and some misconceptions can trip up even experienced investors. Before buying or selling, it’s worth getting clear on these.

Assuming There’s a Price Floor

One of the most dangerous mistakes investors make is that they believe precious metals have a price floor; that because they’ve been high recently, they won’t fall significantly. But history tells a different story. Gold hit $850 per ounce in 1980. By 2003, it had dropped to around $253. That’s over two decades with no return. Silver has shown similar volatility. There’s no reliable minimum or maximum, because prices ultimately reflect what buyers and sellers agree something is worth at a given moment in time.

Misunderstanding Spot Price

Spot price is not what you’ll pay or receive. When you buy physical metals, you’ll typically pay a premium above that spot price. When you sell, you’ll usually receive a discount below it, unless you’re moving large volumes. This spread can directly affect your real returns. Factor this in before assuming a purchase is as straightforward as the quoted price suggests.

Overlooking Tax Implications

Precious metals are classified as collectibles by the IRS, meaning capital gains can be taxed at rates up to 28% — higher than the standard 15% long-term capital gains rate that applies to most stocks. This is a detail many investors discover only after the fact. Consult your tax advisor before buying or selling.

Falling For Predatory Marketing

Late-night TV commercials and online ads frequently target retirees with urgent messaging about “limited availability” and “guaranteed protection.” A few practical rules:

• If they’re charging more than 5% to 8% over spot price, that’s a red flag
• Be skeptical of “collectible” coins where much of the price reflects perceived rarity rather than the metal itself
• Buy from reputable, established dealers and verify what you’re purchasing
• Know in advance where and how you intend to sell

Precious Metals and Your Financial Peace of Mind

For investors nearing or in retirement, the question often becomes less about return and more about stability and peace of mind. Precious metals can contribute to that, but context matters.

If you’re particularly concerned about inflation or currency instability, having a portion of your wealth in gold or silver may genuinely reduce your anxiety about the future. But if you already have meaningful inflation protection through real estate, Social Security with cost-of-living adjustments, or other assets, precious metals may not add much to your peace of mind. 

There are also practical considerations for older investors. Physical metals must be stored securely and can be stolen, lost, or damaged. They can also become a burden for heirs to locate and liquidate. Exchange-traded funds (ETFs) that track precious metals offer a simpler alternative: no storage concerns, easier to transfer, and still providing the portfolio diversification and inflation hedging you’re looking for.

Questions about how precious metals fit into your overall financial picture? Premier Financial Group has been helping individuals, families, and businesses navigate complex financial decisions for over 35 years. As fiduciaries, we are committed to putting our clients’ best interests first. No commissions, hidden costs, or conflicts of interest.

Contact us to get started.