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Invest as much money as
you can into your IRA

AS you know, the tax-filing deadline is fast approaching. Of course, if you've already filed your taxes, April 15 is just one more day. But it's a significant date for another reason: It's the last day you can contribute to your IRA for the 2004 tax year. So, if you haven't "maxed out" your IRA yet, take action now.

You can contribute up to $3,000 -- or $3,500 if you're 50 or older -- to either a traditional or Roth IRA for 2004. (For the 2005 tax year, you can put in up to $4,000 to your IRA, or $4,500 if you're 50 or older.) Your traditional IRA contributions may or may not be tax-deductible, but in any case, your earnings grow on a tax-deferred basis. Although Roth IRA contributions are not tax-deductible, your earnings will grow totally tax-free, provided you meet certain conditions. (Keep in mind, however, than if you take Roth or traditional IRA distributions before you reach 59 1/2, you may be subject to a 10 percent IRA penalty, along with ordinary income taxes.)

Do whatever it takes to fully fund your IRA, every single year. If you find it hard to come up with the entire amount in a lump sum, divide the contribution limit by 12 and make monthly payments. To make it even easier on yourself, set up a bank authorization, so that the money is taken directly from your checking or savings account and placed into your IRA.

You have more than one way to fund an IRA. For example, if you are planning to leave your job, you can roll over all or part of the taxable portion of your 401(k) distribution -- pre-tax contributions, employer contributions, all earnings -- into an existing traditional IRA. You can also roll over after-tax 401(k) salary deferrals, but transferring these after-tax contributions could lead to taxable consequences.

If you roll your 401(k) over to a traditional IRA, you can build the value of your existing account, and you can continue to make contributions. And you could eventually "convert" your traditional IRA into a tax-free Roth IRA, but you will have to pay the taxes that this conversion would trigger.

When you roll over your 401(k), you'll get some key advantages. First, you'll avoid all immediate taxes and penalties. Second, you'll continue to benefit from tax deferral. And third, your IRA may offer more investment options than a 401(k) plan.

While a rollover from a 401(k) to an IRA does offer some important benefits, it isn't your only choice when you depart a job. For example, you could leave your 401(k) assets with your old employer, if the plan permits. Or, if you are taking a new job, you might be able to move your 401(k) assets into a new plan. Also, you could just cash out your 401(k) as a lump sum distribution, although you'd likely face a big tax hit, in addition to an immediate 20 percent withholding. Before deciding what to do with your 401(k), consult with your tax and financial professionals.

When it comes to investing in IRAs, it's hard to get too much of a good thing. So take full advantage of all your IRA opportunities -- they could pay off.