Saving for retirement is an admirable undertaking. It can also be overwhelming. There are so many types of retirement accounts out there these days and a seemingly never-ending list of investment choices. The “paradox of choice” bias hits many people hard when it comes to investing for retirement. At Yields for You, we are here to be help simplify finances and help you make the right choices, for yourself and your loved one.

What Retirement Accounts Should You Have?

First, most people should have both a Traditional IRA (Individual Retirement Account) and Roth IRA. Contributing to an employer-sponsored retirement account like a 401(k), 403(b), or 457(b) if available, is also important. It is an alphabet soup of retirement accounts—we get it. Take heart, though. We are here to relieve your financial worries so that you have the confidence that your retirement savings plan is on track.

Individuals can be strategic about how they go about contributing to these accounts. During years in which you have a high marginal tax rate, it may be wise to put money into pre-tax accounts such as a Traditional IRA or regular 401(k) so that you reduce your taxable income in the current year. Conversely, making after-tax contributions into a Roth IRA or Roth 401(k) can be the savvier move during years when your income is lower and you are paying a relatively low marginal tax rate. (Check out our ultimate guide to paying zero in taxes during retirement, here.)

Taking Your Savings To The Next Level

Taking retirement savings strategies to the next level, performing Roth conversions, can prove to be a tax-saving strategy in a year when, say, you are between jobs and your income is very low. With Roth contributions, the idea is that you pay tax at a low rate today so that you can avoid taxes in the future when your tax rate might be higher.

How Much Should I Save?

“How much should I save?” That’s a common question folks have. Ideally, you should save as much as possible. Why? Well, the longer you save and invest, the more you allow the magic of compounding returns to work in your favor. That means more money for you when you hit retirement age!

It can be wise to max out your 401(k) first, since it has a greater contribution limit compared to a Traditional or Roth IRA. Also, consider that your employer might offer you a 401(k) match—that's free money! Snatch that every chance you get! Once you have contributed the most to your employer’s plan, then put money into an IRA if you have the means.

Health Savings Accounts – The New Roth

Here’s a lesser-known retirement saving trick: leveraging a Health Savings Account (HSA). Most people consider an HSA to be a money source to cover health-related expenses that naturally arise during the year. What few realize is that an HSA can be used like an IRA. Simply save your health-related receipts, then “reimburse” yourself in retirement. Once you hit age 65, you can withdraw HSA money without penalty, even for non-healthcare reasons. Of course, by saving your receipts, withdrawals for healthcare expenses are tax-free. What’s more, many companies today now pitch-in HSA contributions similar to how 401(k) matching programs work.

These are just some of the tips and tricks available to help people maximize their retirement contributions. Just like knowing the ins and outs of how your car works, crafting and fixing retirement plans can be daunting. There are lot of moving parts, and the rules are constantly changing, that’s why it’s critical that you either work with a retirement specialist or you educate yourself as to what it takes to retire and stay retired with confidence and peace of mind. The more you know!