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Invest for Retirement the Best Way

Everyone knows that investing for retirement is a key part of financial planning. But there's a great way that many people could save more for retirement that they never take advantage of, leaving a lucrative tax break on the table unused.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, looks at the best way to invest for retirement: using a Roth IRA. Dan notes that Roth IRAs don't give you an up-front tax break, but they do offer tax-free growth. Given the high tax rates of up to 39.6% on income from high-yield investments like Annaly Capital (NYSE: NLY  ) and American Capital Agency (NASDAQ: AGNC  ) , a Roth IRA lets you shelter all that income from tax. Moreover, even 20% maximum capital-gains rates on regular stocks can eat into your gains. Dan also notes the impact of the 3.8% surcharge on investment income, further hitting high-income taxpayers. Dan concludes with a short discussion of the best investments to maximize the value of a Roth IRA, highlighting high-growth prospects Amazon.com  (NASDAQ: AMZN  ) and Gilead Sciences (NASDAQ: GILD  ) .

Find the right stocks to retire rich
When it comes to investing in Roth IRAs, it's no secret that investors tend to be impatient with the market, but your best investment strategy is to buy shares in solid businesses and keep them for the long term. In the special free report, "3 Stocks That Will Help You Retire Rich," The Motley Fool shares investment ideas and strategies that could help you build wealth for years to come. Click here to grab your free copy today.


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  • Report this Comment On January 16, 2014, at 4:29 PM, carlytx wrote:

    Great video for retirement investing information. I found additional good information on the retirement site Retirement And Good Living which provides information on finances and investments as well as many other retirement topics including health, retirement locations, travel, part time jobs, volunteering, hobbies and more. It also has a great blog of posts by guests from around the globe on many retirement related issues.

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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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Related Tickers

9/17/2014 1:50 PM
AGNC $22.74 Up +0.13 +0.57%
American Capital A… CAPS Rating: ****
AMZN $326.04 Down -1.72 -0.52%
Amazon.com CAPS Rating: ***
GILD $103.19 Down -1.57 -1.50%
Gilead Sciences CAPS Rating: ****
NLY $11.48 Up +0.05 +0.44%
Annaly Capital Man… CAPS Rating: ****

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