401(k)s and IRAs: Grow your money, shrink your taxes

After you've fully funded your 401(k), invest as much as you can in an IRA.

What's great about a Traditional IRA:
• You can deduct your contribution on your tax return (if you qualify).
• You don't owe taxes on your investments until you withdraw the money.
• You can invest in almost anything.

You're eligible...
• As long as you have earned income.
• For a deduction if you're not covered by a retirement plan at work or...
• You're covered by a plan but your modified adjusted gross income (AGI) is $52,000 or less ($83,000 for married couples filing jointly). You get a partial deduction if it's less than $62,000 ($103,000 for married couples).
• You're not covered by a plan but your spouse is and your modified AGI is $156,000 or less. You get a partial deduction if it's less than $166,000.

What's great about a Roth IRA:
• It's one of the only true tax-free investments: You can withdraw your earnings without tax or penalty as long as you're over 59 1/2 and the Roth is at least five years old.
• While you can't deduct your contributions, you can withdraw them at any time tax- and penalty-free.
• You don't have to begin making withdrawals at age 70 1/2.

You're eligible if...
• You have earned income and your modified AGI is below $99,000 for single filers ($114,000 for a partial contribution), $156,000 for joint filers ($166,000 for partial).