Other ways to invest

The government smiles on investors, especially those investing for specific goals, by providing tax breaks.

If you earn income, you can put money in an individual retirement account (IRA), where the earnings grow tax deferred. You may be able to deduct the full amount you contribute to a traditional IRA if you aren’t eligible for an employer’s retirement plan or if your modified adjusted gross income is less than $52,000. That saves you money now.

You might consider a tax-free Roth IRA instead of a traditional one. You can’t ever deduct your contribution, but the earnings will never be taxed — provided you’re at least 59 1/2 when you withdraw and your account has been open at least five years. That could mean thousands of extra dollars in your pocket years from now.

You also get tax breaks for putting money in a 529 college savings account. While you might think you’d open such an account only if you had children to send to college, you can actually set up a 529 to benefit yourself and switch the beneficiary later if you want to. It pays to check it out.