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Let's start by talking about how much money you'll need to save up before your retirement age. A good rule of thumb is that you should save 10 times your ending salary before you retire. This goes for you and any other person (or couple) who is counting on your retirement savings to make it through the next phase of life. So if you make $40,000 a year, you should have approximately $400,000 saved up before retirement.

How long will this take?

This can depend on a few factors: how much you're saving (and by extension, the interest rates and taxes on those accounts), your current age and career path, and expected inflation.

The first thing to consider is what type of retirement account(s) you have available to you. There are two main types: traditional IRAs or 401(k)s. The difference between them is that traditional IRAs are taxed when you put money in, but not when you take it out, whereas 401(k)s are taxed when you take the money out. This can be important if your tax rate will increase during retirement (for instance if you have a growing family or expect to retire as a couple), but for most people, buying a house and having kids tend to be the biggest influence on their income.

There are also two types of traditional IRAs: Roth-IRA and Traditional-IRA. A Roth IRA isn't taxed when you put money in, and is tax free when you take it out; the Traditional IRA is taxed when you put money in, but not when you take it out. It's up to you which one you have, since they both work the same way for retirement withdrawals.

Additionally, if you are eligible for a tax-deferred or tax-free account through your job, this usually is the best option. Just make sure that you're investing in a tax-advantaged account and not just parking your money there by accident – this is very common.

Beyond traditional or Roth IRAs, there are also things like annuities and CDs (certificates of deposit). These types of accounts lock up your money for a certain amount of time (usually five years or more) to give the interest rate a chance to grow.

To decide which account is best for you, run some numbers on an online tax calculator . If your tax rate is going to be higher during retirement, then using a Roth IRA or 401(k) makes sense since you won't have to pay taxes when you take the money out. If your tax rate will be lower, then you might want to consider a traditional IRA.

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