With tax season now in full swing, one question on the minds of advisors is how American workers due a tax refund this year intend use the money. The good news: more than half of them plan to save or invest it.

So reports Principal Financial Group in a new survey, the “Principal Financial Well Being Index: American Workers,” which polled 1,111 employees in February. Conducted by Harris Poll, the survey is one in a series of quarterly studies to identify and track changes in the workplace of small and mid-sized (growing) businesses.

The research reveals that two-thirds (66 percent) of American workers expect a tax refund this year. More than half (53 percent) plan to save or invest the money. And nearly 1 in 4 (23 percent) plan to apply their surplus towards an emergency savings fund.

However, 4 in 10 workers (40 percent) plan to use their tax refund to cover regular expenses such as groceries, utilities or housing payments . 

Many of the respondents also aim to reduce the red ink on their balance sheets. About one-third of respondents (31 percent) plan to use the surplus to pay off debt. Just over a third (35 percent) plan to pay down or pay off short-term debt. And another one in five (19 percent) are choosing to pay off or pay down long-term debt.

The report observes also that low gas prices have yielded savings for American workers at the pump. Thirty-eight percent reported saving $50 or less. And 32 percent reported saving between $51 and $100 each month. Only 2 percent of American workers said they are saving more than $250 monthly from lower fuel costs.

Among the survey’s additional findings:

  • 49 percent of American workers describe themselves as financially healthy.

  • 48 percent of Gen Y workers are optimistic about the economy. This compares to 30 percent of Gen X workers and 29 percent of Baby Boomer workers.

  • 44 percent of all workers are cautious about the economic outlook for 2015.

  • 34 percent of workers remain optimistic about their outlook (up 26 percent from the first quarter of last year).

  • 11 percent of workers say they are pessimistic this year.

“Even while Americans express some uncertainty about the future of our economy, it’s reassuring to see that overall pessimism is down,” said Luke Vandermillen, vice president at Principal Financial. “The economy would benefit from increased consumer spending, but it is encouraging to see Americans are making prudent decisions with their money.”

 See the slides starting on the next page for highlights from the report.