This article is from our friends at LearnVest, a leading site for women and their money.

You know what’s awesome?

Retirement.

No, really. Imagine it: Waking up every day to head to your favorite yoga/art/synchronized swimming class. Catching up with friends daily. Starting (and finishing) every book or movie that catches your eye.

It’s the ultimate extended vacation, and the best part is, by the time you get there, you’ve already paid for it. You know how that happened? You started today.

No, really, today. No matter how old you are, you want to make sure you’re on the right track for retirement. Don’t worry, we’ll walk you through everything you need to know, right here and now.

So go ahead, start stocking up on sketchbooks.

Your Options

To set the stage, we’ll explain the main types of retirement accounts available. There are three: the 401(k), the traditional IRA, and the Roth IRA.

401(k)

A 401(k) is a free retirement account you can only get through an employer, and it holds money taken directly from your paycheck. Sometimes, said employer also contributes money to your retirement fund—that’s called “matching.” Traditional 401(k) plans grow tax-deferred, meaning that you’ll pay taxes when you take the money out, not when you put the money in.

Traditional IRA

A traditional IRA is set up so that your contribution each year is tax deductible (if you’re under a certain income limit*), and you aren’t taxed on the income you make as it grows. You pay those taxes when you withdraw it for retirement, which you’re required to begin doing at age 70½. Anyone can open a traditional IRA.

Roth IRA

The Roth is different from the traditional IRA in that you pay taxes upfront at today’s tax rates. In return, you never have to pay taxes on your investment earnings! This is huge. Consider the following example:

If you’re contributing $150 per month to retirement, your account could hold about $78,000 after 20 years (assuming 7% interest). Over half of that (about $42,000) is investment earnings–the money your contributions have generated just by being in the account. With a Roth IRA, you won’t need to pay taxes when you take out any of that $78,000. With a traditional IRA, you’re taxed on the entire sum, the $78,000. While there is an income limit to open a Roth IRA, anyone can convert her traditional into a Roth (more on that later).

To figure out which account is right for you, use our flowchart:

Keep in mind that the Roth and traditional IRA are subject to income limits.*

The Fourth Option

If you’ve maxed out your 401(k) and Roth or traditional IRA, you have one more option: a non-deductible traditional IRA. For more on this option, see our guide.

If you’re a married, stay-at-home mom, consider opening a spousal IRA. More on that here.

"But I Only Have $1,000!"

Even if you feel like you don’t have a ton of money to invest, that’s OK. “Even if you can only save 1% of your paycheck, you should be saving for retirement,” says LearnVest Financial Planner Stephany Kirkpatrick CFP (R). “Especially if your company will match your 401(k) contributions!”

(Of course, we don’t expect you to have $1,000 just sitting around, waiting to be invested. You’re likely contributing to your accounts automatically from your monthly paychecks, so the following sums are the amount you’ll have contributed to your retirement by the end of the year.)

If You’ll Have $1,000

First and foremost, max out your company’s 401(k) match by contributing however much money your employer has pledged to match. Getting an extra $500 per year in free money could equal as much as $21,000 in 20 years (assuming 7% interest). And it didn’t cost you a thing. If you don’t have a company match, open a Roth IRA (as long as you’re within the salary limit) and lock in today’s tax rates.

If You’ll Have $5,000

You’re in good shape! That’s actually the most you can save in a Roth IRA each year in order to gain a tax benefit. First, max out your company’s 401(k) match, if there is one available, then dive into a Roth IRA with the remaining funds. If you don’t have a company match, open a Roth IRA. Putting aside $5,000 today could mean about $217,000 in 20 years.

If You’ll Have $10,000

If you have a 401(k), split your $10,000 between your 401(k) and a Roth IRA so you can save the full $10,000 (since a Roth caps out at $5,000 if you’re under 50). If you don’t have a 401(k), then put $5,000 into a Roth IRA and $5,000 into a non-deductible traditional IRA. Your non-deductible IRA won’t give you an immediate tax break–it will only grow tax deferred. But it’s still a good deal, since it lets you save extra!

If You’ll Have More Than $10,000

Put $5,000 into a Roth IRA and the rest into your 401(k). You could save up to $22,000 a year if you are single (or $44,000 if you’re married) using this combo—which could turn into more than $950,000 in 20 years. If you’re above the income limit for a Roth, substitute a traditional IRA (or non-deductible IRA or taxable brokerage account, if your income is too high for the traditional).

*While the 401(k) and non-deductible IRA don’t have income limits, while the Roth and traditional do. You can contribute to a Roth IRA as long as your income is less than $110,000 if you are single or $173,000 if you are married. For a traditional IRA, you can only deduct if you aren’t covered by a 401(k) at work and your income is below $58,000 single or $92,000 if you are married.

More From LearnVest

  • Want more of where that came from? Learn about Roth IRA Movement Day.
  • Want to know how much your money will grow for retirement? Use our sliding tool.
  • Don’t be intimidated by retirement. Take control of your money with Take Control Bootcamp.
  • Photo courtesy of www.seniorliving.org.