ok in a nut shell....your basic 401k savings plan is typically offered by a company you work for. you get to put away pretaxed money from your paycheck into a retirement savings account. a lot of companies do matching, such as they'll match say up to x% of what you put in (ie, my company matches me $1 for $1 up to 3%, then they match it $0.50 for $1 for the next 2%). this just encourages ppl to save.Originally Posted by SteveO
also at the same time you get to choose what "plan or track" your 401k is. that has to do w/risks and what the money you're saving is going into. for younger folks such as you and i, we typically go for the higher risk/reward portfolios, growth is higher, but there is also more risk (most of these portfolios contains more stocks than other equities).
the roth ira is a fairly new ira plan that basically let's you put money away for retirement, but the money is POSTtax. basically you want to do this banking on the fact that tax now will be less than when you actually retire, so when you take the money out whenever you do retire, you won't have to pay taxes then.
hope that helps
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