It's kind of important to know your stuff when it comes to money. Consider IRAs. You may know the bare-bones basics: An IRA can help you build a secure retirement. But if that's all you know, you may end up sending your $4,000 contribution for 2005 to the wrong IRA -- maybe, for example, to the International Reading Association, the Inflammation Research Association, or the Illinois Restaurant Association. You get the idea: Ignorance is fraught with peril. (Though some of these outfits may actually put your money to good use, I'll admit.)

Below you'll find a quick guide to some important IRAs, with some pointers to help you invest your hard-earned money effectively.

Ira Gershwin
If you're a fan of "I'll Build a Stairway to Paradise" or "Porgy and Bess," you're a fan of Ira Gershwin, George Gershwin's older brother and lyric-writing partner. Ira ended up focusing on business as a young man, but soon found himself composing poems and clever lyrics to accompany his brother's toe-tapping tunes. This Ira has made many people's retirements more enjoyable, but he's in no position to help your $4,000 grow over the decades when invested in the stock of Apple (NASDAQ:AAPL) or PepsiCo (NYSE:PEP), or in one of the top mutual funds featured in our Motley Fool Champion Funds newsletter.

Ira Glass
Another major American Ira is Ira Glass, who hosts a popular decade-old public radio show, "This American Life." This Peabody Award-winning series combines documentaries, personal stories, and short fiction to discuss issues as simple as summer camp or as complex as the Iraq war. Again, if this Ira is still in business during your retirement, he may well enhance it. But he probably won't be able to turn your $4,000 into $27,000 in 30 years.

Ira Packard
This Ira probably won't help you much with your retirement savings, either; the 95-year-old Maine resident is busy enjoying his own retirement after a career in dairy farming. According to the Waldo, Maine VillageSoup, he golfs almost every day in his backyard and tends to his lawn and driveway meticulously each week. Ira is a model of how to spend your retirement doing what you enjoy, but he won't help you buy that condo in Boca Raton.

Traditional IRA
This is a much better place for your retirement dollars than the preceding Iras. For 2005, you can contribute up to $4,000 (if you meet certain qualifications) -- $4,500 if you're 50 or older. Do so, and the amount you contribute is deducted from your income -- and therefore isn't taxed. If you're in the 25% tax bracket, contributing $4,000 will knock $1,000 off your taxes in 2005. (You'll eventually be taxed on the IRA money when you begin withdrawing it.)

Roth IRA
The Roth IRA, for many of us, is an even better option. You plunk post-tax money into it, so you get no up-front tax benefit. But if you appreciate delayed gratification, get this -- the money you eventually withdraw will be tax-free. Imagine that you opened a Roth IRA account (which you can do at most brokerages -- we can help you find one that charges very low commissions) and invested $4,000 in Valero Energy (NYSE:VLO) stock. Valero stock has nearly septupled over the past five years. Let's say that it increases in value tenfold over the next 20 years (that's roughly 12% annual growth), leaving you with $40,000 in your IRA. If your gain of $36,000 were taxed at current long-term capital gains rates, you'd probably be looking at a tax bill of more than $5,000. But since it's in a Roth IRA, your tax is . zero!

Learn more
There's a lot to learn and a lot to like about IRAs. Learn much more in our IRA Center, which features info on the various kinds of IRAs, eligibility restrictions, how to open an IRA. It even offers a comparison chart for IRA accounts at Ameritrade (NASDAQ:AMTD), E*Trade (NYSE:ET), and Sharebuilder, permitting you to see fees and other data at a glance.

In addition, make sure you're tending to your big retirement picture. Our monthly Motley Fool Rule Your Retirement newsletter can help you start planning for the future you want. You've got little to lose and a lot to gain by trying it for free.

And while you're contributing to IRAs, consider chipping in a few extra bucks for some worthy charitable organizations through our ninth annual Foolanthropy drive. Take a few minutes to learn more about this year's five deserving honorees, then join the thousands of other Fools who've helped us raise more than $2 million in past campaigns. If nothing else, it's a probably better use for your money than, say, the Intercollegiate Rowing Association.

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Selena Maranjian 's favorite discussion boards include Book Club , The Eclectic Library and Card & Board Games. She owns shares of PepsiCo. For more about Selena, view her bio and her profile. You might also be interested in these books she has written or co-written: The Motley Fool Money Guide and The Motley Fool Investment Guide for Teens . The Motley Fool is Fools writing for Fools.