Expert recommends saving tax returns for retirement

This photo taken April 13, 2014 shows the headquarters of the Internal Revenue Service (IRS) in Washington at daybreak. Tuesday, April 15, is the federal tax filing deadline for most Americans. (AP Photo/J. David Ake)

PROVIDENCE, R.I. (WPRI) –The deadline to file taxes in Rhode Island was Monday. If you’re filing in Massachusetts, you have until Tuesday.

About 70 percent of taxpayers can expect a federal tax refund. The average federal return is more than $2,000.

Financial experts say that money could be a great way to jumpstart your retirement savings.

“We’re  encouraging people to take that opportunity to think about setting aside part or all of their refund toward their long-term retirement savings,” said Richard Ludlow of myRA.

Ludlow is the executive director of the myRA program – a retirement savings program launched by the United States Treasury.

“We designed this specifically for the 10s of millions of Americans who don’t have access to an employer-based retirement program,” Ludlow explained.

So far, Ludlow said the response to the program – which is fairly new – has been phenomenal.

“We had a chance to speak with many community groups that work with individuals on housing decisions and financial decisions,” Ludlow said. “So we’ve really seen community groups all over the country embrace this.”

According to Ludlow, 10,000 people have already started saving with the program in the past few months.

One thing Ludlow has noticed: once people start saving, they keep saving.

“They saw that people tend to take pride in seeing their balance grow and start to think of themselves as savers,” he said. “It’s a habit that people tend to continue as they see the value of doing so.”

If you contribute $40 a month for 15 years, you can save more than 87,000 dollars.

Once you reach a $15,000 balance, your myRA account will be rolled over into a private-sector Roth IRA so you can continue your savings.

For myRA accounts, there are no minimum balances and fees. For more information on the program, click here.

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