Reinvest your tax refund in retirement

As Americans receive their 2006 tax refunds, the temptation for many is to book a family vacation or purchase a new plasma TV. But, with the IRS estimating the average refund to be approximately $2,548*, it is also the perfect opportunity for Americans to give their retirement savings an instant boost.

"While your tax refund may feel like an instant windfall, the best bet may be not to succumb to the instant gratification of spending it right away," says Tim Schmidt, managing partner for Thrivent Financial for Lutherans. "Instead, tax filers should consider reinvesting their refund into their retirement savings. Not only will this pay out in the long run, but there may also be tax savings implications in 2007 depending on how it is invested."

According to Schmidt, traditional IRAs may offer opportunities for tax-deductible contributions based on the investor's income, filing status and whether or not his or she has an employer sponsored plan. For those who do not qualify for tax-deductible traditional IRA contributions, a Roth IRA will offer tax-deferred growth and (qualified) tax-free distributions. Consumers should speak with a financial professional to determine how to best invest their tax refund.

"This is great time of year to set aside time, either on your own or with a professional, to assess your complete financial situation, including preparing for retirement," says Schmidt. "There are many resources available online, including a new Web site from Thrivent Financial - www.ThriveQ.com - that can provide a baseline of where you are and what steps you need to take to reach your retirement vision."

Raise your retirement IQ

Saving, rather than spending, your tax refund is reflective of one of Thrivent Financial's Seven Principles for Retirement - Save and Invest. These seven principles (Have a Vision, Plan Ahead, Rethink Working, Spend Wisely, Save and Invest, Protect Your Future, and Give Back) are the foundation of Thrivent Financial's new online retirement planning tool - www.ThriveQ.com. ThriveQ helps individuals explore and assess their own retirement IQ and offers immediate suggestions to help users improve their ThriveQ score and turn their retirement vision into a reality. And, since users can save their results between visits to the site, they can track their progress - including the impact of investing their tax refund year after year. For additional information, visit www.ThriveQ.com or www.thrivent.com.