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Retirement is a point in life that everyone looks forward to. Being able to stop working full-time and enjoy your later years is a wonderful time. You have the chance to travel, volunteer, spend time with family, and do other activities you didn’t have the chance to while focusing on your career. However, in order to fully enjoy retirement, you need to plan ahead and start saving. It can be difficult to decide on what retirement account is best for you and your goals, but there are plenty of great options out there to choose from. Here’s some advice on how to pick the best retirement account for you.

401(k)

Most 401(k)s you’ll encounter at a company are defined contribution plans. This type of 401(k) means employers set up the plan for you, but then you have the option of contributing to it. Employees decide how much of each paycheck they want to put into the account.

Usually, employees have limited options when it comes to the investments they can choose from, which can be a disadvantage to some, but an advantage to others. If you’re unhappy with your options through the company plan, you can always open a secondary retirement account you fully control.

You should certainly take advantage of any retirement plan your company offers; there are higher contribution limits on 401(k)s and you put in pre-taxed money, which lowers the amount you have to pay taxes on throughout the year, though you will have to pay taxes when you pull the money out of the account. Finally, if an employer offers a company match, take advantage of it! You’re getting free money toward your retirement account, so make sure you max out the match.

IRAs

The other most common type of retirement plan you can choose from is an IRA. Major advantages of IRAs are that there are more options for how you invest your money and have greater control over your portfolio. You can also utilize an IRA in addition to a 401(k). However, there are some disadvantages, such as contribution limits ($5,500) and not giving as much benefit to higher earners, since the contribution limit is determined by how much you make.

There are two main types of IRAs: Roth and traditional. For Roth IRAs, you do not have to pay taxes when you withdraw this money, which happens because the money you’re investing is already taxed income. Traditional IRAs function more like 401(k)s, meaning that the money you’re investing comes from pre taxed income and lowers the taxes you’ll have to pay that year. IRAs are a great option if you do not have a retirement plan through your employer or if you simply want to contribute more to retirement savings.