IRAs in 2014: 4 Facts You Should Know

Opening an IRA in 2014 is a smart money move, but it pays to know what's involved. Here are four key facts you should know about IRAs.

Jan 3, 2014 at 2:24PM

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.

Fool contributor Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Celgene and Netflix. The Motley Fool owns shares of Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.

A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

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