SURVEY SAYS: Uses for Additional Take-Home Pay

We recently covered a survey in which Americans reported an average bump in take home pay of $130.76 as a result of tax reform. Nearly 13% indicated they are going to use that money to save more for retirement.

Last week, I asked NewsDash readers, “Did your take-home pay increase as a result of tax reform, and if so, how do you plan to use it?”


Nearly all (93.3%) of responding readers reported their take-home pay increased as a result of tax reform, while 6.7% said it did not.


The top responses for how they will use that extra money was to save more in retirement accounts and put it away for emergency savings, at 27.3% each. This was followed by 20.4% who said they would just keep the money in checking to help pay day-to-day expenses.


Only 4.5% said they will use the money to make car or home repairs that are needed; 18.2% will pay off debt faster; 9.1% will invest the money in the stock market (outside of their retirement accounts); and 6.8% will increase savings or start to save for their child’s education.


Among the “other” responses were to increase health savings account (HSA) contributions, adjusting federal withholding to avoid paying taxes or more in taxes next year, and pay for taxes and increasing health care costs.


In comments left by readers, most express concern either about having to pay more in taxes or have a lower tax refund next year, or having to eventually pay to address the increased budget deficit. A couple of readers expressed that it was a nice surprise and one shared how much he or she bumped up his/her retirement savings. No Editor’s Choice this week.


A big thank you to all who participated in the survey!



$21 trillion and counting.

I don’t know yet if my take-home pay will increase since I don’t get paid until the end of the month! But, I’m hopeful!!!

“… average bump … of $130.76…” Means what? Per week? per month? per year?

I’m already maxed out on 401(k) and don’t want to have a large tax bill at year end, so I increased my Federal withholding. IMHO – The tax reform doesn’t seem to help older working couples, who no longer have dependents or college age kids.

Due to change in withholding tables, my current paychecks are higher. However, because I live in a high tax state, my actual federal taxes will be higher due to limitations on deductions for state and local taxes on federal returns. I will need to adjust my withholding, so in the end I will be worse off under the new law.

Since we are robbing Peter to pay Paul, I hope I’m not Peter this year (somehow owing the IRS at the end of the year).

although my take-home pay increased, since I live in one of the states with high income taxes, my overall annual pay has decreased. No Tax cut for me.

I do not trust that the new tax tables will apply to our situation. I suspect that some of our employees will be complaining at this time next year when they realize the extra take-home pay means they now owe instead of receiving a refund.

Extra take home pay is nice, but it doesn’t change the fact that there doesn’t seem to be a plan to pay for it.

Employees called me the week they received their first larger paycheck and were asking why their checks had increased.

Thank you President Trump for the great job you are doing!

I only wish we would have reduced government spending to pay for the tax cut.

Since the increase was only a few bucks…not close to what the President and Congress said it would be…I’ll just be using it for daily expense.

Pleasant surprise. Increased 401(k) contribution by additional 2% as a result.

I truly believe it’s a shell game and if I spend it I will end up owing taxes next year.

We are going to end up paying for it in the end.

It’s nice to have the lower rates but we’re going to have to pay the piper on the national debt at some point. I hope people understand that.

I’d be lying if I said the extra $100 per month wasn’t a huge help right now during a very tight financial time, but I’m concerned I’ll end up owing next year when I file my taxes.

Long before tax reform, my spouse always talked about what to do with ‘extra’ money. I tried to explain ‘extra’ money is a myth. Since we can’t print it, all money goes toward bills or savings, period.

Minimal effect on my day-to-day life. Wish less had gone to super-rich and more had gone to lower and middle classes.



NOTE: Responses reflect the opinions of individual readers and not necessarily the stance of Strategic Insight or its affiliates.