"It's a great way to put away money and also at the same time get a current tax break," says Tobie Stanger, a senior editor with Consumer Reports Money Adviser.
Stanger reminds us that if you meet the income limits, you can sock away a sizeable amount in an IRA.
"You can put $5,000 for 2012. If you're 50 or older, you can put in $6,000."
Those limits are higher for 2013. And there's no reason to wait to the last minute to do it.
"The great thing about an IRA is that it's growing tax free and you do not have to pay any tax until you take the money out," Stanger says. "So if you are at a lower tax bracket at retirement, you will pay less overall."
You have all sorts of investment options with your IRA money: individual stocks, mutual funds, money market accounts, bonds, annuities, even some real estate.
Just remember, you don't want to touch that money until you're at least 59 1/2. If you make a withdrawal before that age, you'll pay a 10-percent penalty on that amount, as well as the income tax.
For more information
CNNMoney: IRA Basics
Bankrate: Avoid These 8 Common IRA Mistakes
SmartMoney: 9 Frequently Asked Questions About IRAs