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These Are Your Last-Minute, Tax Day IRA Options

NEW YORK (TheStreet) -- It happens to the best of us: April 15 creeps up for months and sprints to the finish, leaving so little time for last-minute moves such as funding an IRA. Happily, this doesn't have to be the headache it seems.

The looming deadline does matter, as today is the last day to contribute for 2013. If you are eligible to deduct your contribution, it can produce a nice tax saving right away. And even if you'll get no deduction, your 2013 contribution can enjoy tax-deferred growth for decades. Whether you can deduct your full contribution, a maximum of $5,500, or $6,500 if you are 50 or older, depends on your income and whether you or your spouse have a retirement plan at work. Here's a calculator for this.

Brokerages, banks and mutual fund companies make IRA enrollment easy with online signup. With little time to weigh options, you can open an account, put your contribution into a money market for the time being, then move it to a more suitable investment after doing some research.

But don't wait too long. Vanguard Group, the mutual fund giant, found that last-minute contributions that went into cash such as money-market funds tended to stay there for months. That could have been costly in 2013, because the stock market soared early, then kept on going.

Investors who don't want to do a lot of investment research, or feel unequipped for it, have a couple of easy options.

One is to pick an index fund representing the broad market. Indexers have very low fees, which is quite valuable for a long-term holding such as an IRA. And they tend to do better over time than actively managed funds that hunt for hot prospects. Because indexers' investment strategy is automatic, simply buying and holding the stocks or bonds in a market index such as the Standard & Poor's 500, you don't have to worry about something happening to your investment manager.

Another easy option is the target-date fund, with a date matching your expected retirement. These divide the investor's money between stocks and bonds, readjusting to a safer, bond-oriented mix as the retirement date approaches. Once your money's invested, you really don't need to do anything more. Target-date funds typically use a mix of index funds.

People with ordinary taxable investments as well as tax-favored holdings such as IRAs and 401(k)s are wise to think about which type of holding should go into which account.

Some types of investments make relatively large cash payments every year through interest earnings, dividends or capital gains distributions. Even if that cash is reinvested automatically, it is taxed in the year it is received if the investment is in a taxable account. So investments that churn out lots of cash can be held in an IRA, allowing the taxes on that reinvested cash to be postponed until money is withdrawn.

But for now, make that 2013 contribution today so you can get any deduction available to you and ensure those tax deferrals. Put the contribution into a money market fund if you need time to choose something better. Just be careful not to dawdle on your long-term decision.

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