Preparing for your retirement can be stressful, especially with the large number of options when it comes to investing and saving your money. When deciding which retirement plan(s) to invest in, it is important that you consider the advantages and disadvantages of the various options as they pertain to you, your finances, and your goals. Below are a few retirement plan options to consider and suggestions on how you can distinguish the best options for you.


IRAs & 401(k)s

Two of the standard retirement plan options are IRAs (individual retirement accounts) and 401(k)s. Both provide opportunities to tuck away some of your income to grow in anticipation of your retirement. The primary difference between these two options is that 401(k)s are employer-sponsored whereas IRAs are independently initiated by the individual. Both have limits on annual contributions.

Identifying whether an employer will match employee contributions to a 401(k) can help individuals determine whether this course is right for them. 


What to Consider

Beyond the characteristics of these retirement plans, it is also important to address your financial status and retirement goals. Determine when you will need the money in relation to when you want to retire; some plans require individuals to withdraw money beginning at a certain age, so if you are hoping to grow your nest egg without relying on those retirement funds, an option like a Roth IRA (which does not have this sort of requirement) could be more suitable to your desires.

If you want to leave some of your retirement funds to descendents, you should consider the pros and cons of plans like traditional IRAs vs Roth IRAs.

One of the more obvious considerations you should make simply pertains to your income. If you make more than an established amount (differing for those who are married and those who are single), you will be more restricted in what you can contribute to your retirement plan each year. 

Your age at the time of consideration, existing 401(k)s you have, and any disabilities afflicting you should also be considered when determining your retirement timeline and ultimately plan of action.


Though there are limits as to what you can contribute to retirement funds based on your income and the plans themselves, you also often have the option to invest in both an IRA and a 401(k). It is essential that you ensure the plans are compatible prior to making any contributions.