Tax sheltered retirement plans

Working with clients I always tried to make sure that taxes were a big part of our plan for their retirement. Both now and when they retired. A nice balance between saving money on taxes now, and putting them into a posittion to save money down the line as well by having a source of tax-free income.

The first and foremost is to ustilize things that your employer already provides. At least to the point where they give you free money on top of what you invested. 401(k) plans typically have some sort of matching that all employees should take advantage of. Many times you can get a match up to 6% of your income where your employer will give you an additional 1% for every 2% you put in up to 6%. So basically you get a 50% bonus just for saving money. If $100 is 6% of your income your employer may be matching it with an additional $50. There isn't a better way to get a 50% return on your money with the free bonus. No matter what your situation you should be trying to make sure you take that free money. Plus you are going to get a tax deduction for your contribution on top of it for that year AND that money will grow tax free until you pull it out.

Check out this article on 401(k)s, IRAs, and more here for a breakdwon of what these plans can do for you.