Nearly one in four Americans regret last year's tax refund spending, survey finds

With tax refunds running about 11% higher than last year, a new survey reveals a persistent disconnect between how Americans intend to use that money and what actually happens when it arrives.

Online retirement provider PensionBee surveyed 1,000 US adults who received refunds in the 2025 tax year, examining the gap between their past behavior and their plans for 2026. The findings, released April 22, show that nearly one in four Americans – 23% – have regrets about how they spent last year's refund. Among those with regrets, more than half, or 57%, wish they had saved or invested more.

The timing of the survey coincides with a notably more abundant refund season. IRS data as of April 17 show the average refund for individual filers stood at $3,275, up from $2,942 at the same point last year, an 11.3% increase that reflects new deductions introduced under the One Big Beautiful Bill Act, including breaks for tip income, overtime pay, auto loan interest, and seniors.

The intention-reality gap

The PensionBee data suggest higher refunds may not automatically translate into better financial decisions. The survey found a recurring pattern: short-term pressures routinely crowd out long-term goals. The gap is sharpest around savings and retirement.

Around one-eighth of Americans (13%) plan to build an emergency fund with their 2026 refund – nearly double the 6% who actually did so last year. Similarly, 9% say they plan to direct their refund toward retirement savings, though only 6% have historically followed through. 

Read more: Americans eye tax refunds to fuel savings surge in 2026, but yield gap persists

Meanwhile, everyday spending gobbled up a larger share of refunds than expected. 35% of Americans ended up using their last refund to cover day-to-day costs, compared to the 29% who said that was their plan – a gap the survey attributed in part to consumer prices that have risen 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."

The pattern extends beyond PensionBee's findings. A separate April survey of 2,000 Gen Z and Millennial adults by Beyond Finance and Operation HOPE 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 found that 59% of respondents feel that spending on meaningful experiences today seems more practical than saving for long-term goals that feel increasingly out of reach, and 65% feel uncertain whether traditional retirement planning will deliver real security.

Regret hits hardest for younger Americans

The PensionBee data shows that second-guessing is concentrated among younger generations. Gen Z is three times more likely than Baby Boomers to switch things up by using this year's refund differently than last. While 68% of Baby Boomers expressed confidence in how they used their previous refund, only 47% of Gen Z and 48% of Millennials said the same.

With 2026 tax refunds among the highest in recent years, Savova said that "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."

Read more: Don't squander those tax refunds! Advisors offer tips for clients getting cash back from Uncle Sam

The survey also identified a few areas where plans and outcomes aligned closely. The share of respondents planning to invest through a brokerage account (5%) was matched exactly by those who followed through, and the same number of people who planned to treat themselves (15%) reported doing so. Debt repayment also held fairly steady: 26% planned to pay down debt, while 28% ultimately did.

For advisors whose clients received larger-than-usual refunds this season, the PensionBee data points to a narrow but recurring window of opportunity. The survey 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 and the temptation to spend is correspondingly greater.