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IRAs in 2014: 4 Facts You Should Know

The new year is a great time to think about making positive changes for your financial life in 2014, and taking a look at IRAs is definitely one great way to take a step forward. But many people don't know the basics of IRAs.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, looks at four key facts you should know about IRAs. Dan notes that you can still make an IRA contribution for 2013 so long as you get it done by April 15. Moreover, the amount you can contribute remains the same in 2014, with those under 50 able to put $5,500 in an IRA and those 50 or older getting a higher $6,500 limit. Dan then discusses the tax benefits of IRAs, noting that some people with high incomes and retirement plans available at work aren't allowed to deduct their IRA contributions. Dan concludes by discussing the true value of IRAs, noting that the tax deferral lets you rebalance core portfolio holdings like Vanguard Total Stock (NYSEMKT: VTI  ) and iShares Russell 2000 (NYSEMKT: IWM  ) without suffering tax consequences. He also talks about how owning Netflix (NASDAQ: NFLX  ) , Celgene (NASDAQ: CELG  ) , and other high-growth stocks in an IRA gives you more flexibility to consider options without worrying about taxes.

Be smart about investing
IRAs are a great way to get yourself more into the groove of investing. That's especially important, because many investors stayed out of the market in recent years, missing out on huge gains and putting their financial futures in jeopardy. In our brand-new special report, "Your Essential Guide to Start Investing Today," The Motley Fool's personal finance experts show you why investing is so important and what you need to do to get started. Click here to get your copy today -- it's absolutely free.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 04, 2014, at 12:51 AM, poorone wrote:

    His Information is correct, but for the average working man to decipher and make it work for him is going to be hard. reason being lack of knowledge and time if he has a family ad living on the edge of being poor almost impossible.

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Dan Caplinger
TMFGalagan

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on Fool.com. With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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