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how to: invest your money

Saving money and learning about investing is always a smart plan. Even if you’re newly hitched, it’s never too soon to start planning for those golden years. Think about it: Do you imagine yourselves lying on a beach or working behind a desk? If you picked the beach (or travel, or golf, or anything other than the 9-to-5 grind), you’ve come to the right place. We have all kinds of investment advice, including the basics of how to invest wisely and what all those financial terms really mean. Not sure where to begin? Start with our five easy steps to invest your money. We also have investing advice and Q&A on all kinds of financial basics about investing -- learn the difference between a 401(k) and an IRA, how to invest your savings, and your options if you can only invest a small amount. Our basic investing advice will help you get ready. But before you invest your money, you should be sure you’re out of debt: Use our debt calculator to help plan your payments, and follow our simple steps to go from credit card misery to debt free. And if your problem is a lack of cash, we’ve got tips for you, too. Learn the habits of spending-savvy couples, and find easy ways to save more of each month’s paycheck and stick to your budget. Don’t want to go it alone? Check out our local pages to find a financial planner in your area for some in-person investment advice.

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Q.

The Nest Q&A

How does a Roth IRA work? What makes it different from a traditional IRA?

A.

When it comes to taxes, a Roth IRA is pay-as-you-go; a traditional one is “bill me later.” To qualify for a Roth IRA, a married couple must have a combined adjusted gross income (that includes your paycheck, interest income and inheritance) of less than $159,000. If that's where the two of you fall, you can contribute up to $5,000 this year. Your Roth IRA isn't tax-deductible now, but you won't lose savings when you withdraw later in life. A traditional IRA, though, offers tax-deferred growth, which means you won't be taxed until you withdraw funds. It also has a maximum contribution of $5,000 for 2008. If you want to transfer your IRA to a Roth IRA, you'll be taxed all at once but you won't have to front any extra upon withdrawal as long as you wait to do so until you're 59½.