5 Last-Minute Stock Ideas for Your IRA

With April 15 coming up fast, here are five stocks that could put some pep in your retirement accounts' step over the long run, and perhaps even save you money on your 2013 taxes!

Mar 30, 2014 at 3:15PM

Tax day is growing ominously closer, with just over two weeks left before Americans will have to file their taxes. For many of us it's a burdensome time of the year, retracing our steps to find outdated receipts and reconciling our money spent and money earned. It can also be a lucrative time of the year for most Americans, since many will end up getting a federal refund.

For tax filers who owe, who expected a bigger refund, or simply didn't max out their Individual Retirement Account contributions in 2013, tax time can also be a time of the year when turning toward a Traditional IRA or Roth IRA can make a lot of sense.


Source: Stockmonkeys.com, Flickr.

Generally speaking, there are just a handful of deductions that you can take up to April 15 and still apply to your 2013 taxes. A contribution up to the $5,500 limit for a Traditional IRA is one of them. Traditional IRAs allow you an upfront tax deduction based on the amount contributed in exchange for paying taxes on the withdrawals beginning after age 59 1/2. You'll want to keep in mind, though, that these benefits do phase out based on your adjusted gross income.

The other option, of course, is a Roth IRA, which allows your profits to grow completely tax-free, but you'll get no upfront tax deduction in return. There are also income limitations for who can contribute to a Roth IRA. For filers looking to lower their taxable income for 2013 this isn't going to help, but for young adults who have time on their side, a Roth IRA could be a great idea.

With that in mind, today I'm offering up five last-minute IRA ideas with a varying degree of risk and reward in an effort for younger and older investors, as well as those who are more risk-averse and risk-willing.


I'm not looking for any bonus points in originality by suggesting Apple for your IRA, but it makes a lot of sense merely from a cash flow perspective, especially if you're young. Apple is currently sitting on a mountain of $158.8 billion in cash and it's paying out $12.20 in annual dividends per share for a current yield of 2.3%. Over the past two years Apple has generated over $41 billion in free cash flow, meaning if it were able to keep up its current growth rate, or even if its growth rate stagnated, it could most likely generate in the neighborhood of $400 billion to $450 billion in cash just over the next decade. By comparison, Apple's current market value is only $479 billion. Assuming it can maintain its share of the pie through innovation Apple presents an intriguing value proposition that bodes well for the long-term investor.

Kinder Morgan (NYSE:KMI)
You may have heard of this stuff called oil and natural gas -- it's kind of a big deal in the United States. So big, in fact, that oil and gas drillers have delivered an increase in crude oil output, according to the Energy Information Administration, in each of the past five years. What this means is big demand for the middlemen like Kinder Morgan, which handle the pipelines, transportation, transmission, and storage of oil and natural gas. We're still discovering new shale deposits onshore and fields deep in the waters off the coast, but the big money is flowing toward infrastructure plays like Kinder Morgan. With a 5.3% yield it's going to satiate most income investors' appetites, and its below-average volatility will allow risk-averse investors to sleep well at night.


Source: Stockmonkeys.com, Flickr.

MasterCard (NYSE:MA)
For younger investors who are less concerned with dividend income and seeking higher growth opportunities, payment facilitator MasterCard might be the perfect solution. MasterCard has both credit and debit cards that bear its logo as it acts as an intermediary between merchants, banks, and customers. The end result is that MasterCard nets a merchant fee with each transaction and has absolutely no debtor liability since it doesn't lend money like traditional banks or lending institutions. Plus, the barrier to entry among payment processors is incredibly high, so market share among the big four within the industry is well protected. With much of the world still using cash, MasterCard has a multi-decade, double-digit growth opportunity at hand and may make a perfect buy-and-hold candidate for young adults.

Medtronic (NYSE:MDT)
Sometimes the smartest thing you can do as an investor is play the odds, and within the health-care sector we understand that baby boomers are aging and the world's overall population is growing. This means the need for medical devices ranging from pacemakers to spinal implants is only going to increase, making Medtronic, the world's largest medical device maker, a potentially intriguing buy. You'll probably find faster growth rates within the sector, but its 2% yield and specific focus on emerging markets makes Medtronic stand out above the pack. Similar to Apple, as long as it can maintain or build on its market share there's not much standing in the way of steady income and share price appreciation for the more risk-averse investor.

Starbucks (NASDAQ:SBUX)
Finally, why not consider a company that's completely manhandling all other competitors within its sector. The years of high-rate growth may be gone for Starbucks, but it still has a blend of U.S. expansion and emerging market introduction and expansion (such as in China and the remainder of Asia) where it can balance out double-digit growth potential overseas with low single-digit growth potential in the states. Starbucks also offers intrigue to all walks of investors because it maintains strong pricing power, is a leading menu innovator, and even partners with its primary rivals in order to drive business growth. With growing global brand recognition and a modest 1.4% yield, young and old investors may be able to grind out solid gains with Starbucks.

Are you taking advantage of this little-known government tax rule?
Recent tax increases have affected nearly every American taxpayer. But with the right planning, you can take steps to take control of your taxes and potentially even lower your tax bill. In our brand-new free special report "The IRS Is Daring You to Make This Investment Now!," you'll learn about the simple strategy to take advantage of a little-known IRS rule. Don't miss out on advice that could help you cut taxes for decades to come. Click here to learn more.

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

The Motley Fool owns shares of, and recommends Apple, Kinder Morgan, MasterCard, and Starbucks. It also owns shares of Medtronic. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers