BOSTON (CBS) – No one has ever been guilty of saving too much for retirement! So if you use your refund to do some retirement planning you will be so ahead of the curve!

Workers put off retirement planning because the goal seems so far away. Ask any Baby Boomer what they would have done differently and they will tell you they should have started when they were younger.

So consider taking that refund and investing it in your future.

Increase your contribution by the amount of the refund to your retirement plan at work. Then use those refund dollars to make up the lost income over the remainder of the year.

If you don’t have a retirement plan at work consider using an IRA for retirement savings. If there is no plan at work your IRA will be deductible. You can contribute up to $5,500 this year and if you are over 50 there is a catch up provision and you can add an extra $1,000 to the account.

Consider starting a Roth IRA with the tax refund. Limits are the same for all IRAs. But with a Roth IRA there is no upfront deduction. But when you withdraw the earnings in retirement there will be no income taxes due.

Think about your spouse. An at-home spouse can use the refund to open a Spousal IRA. This is an IRA funded for a spouse with little or no income by a spouse with income. The combined income of the spouses must be at least equal to the amount contributed.

A $3,000 addition to your retirement account at age 40, assuming a 8% return by the time you’re 67 could be worth almost $24,000, do that every year for the next 27 years and you could have over a quarter of a million dollars ($286,000) in your nest egg.


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