The best and easiest place to save for retirement is in your company's 401(k) plan, or 403(b) if you work for a nonprofit firm. Your contributions are pretax, which lowers your taxable income, and many employers will match a portion of your contributions. You won't pay taxes on your earnings until the money is withdrawn, presumably when you retire.

Every company has its own rules about how much you can invest, what types of investments you can choose, and whether or not they'll match your contributions, so consult your benefits department. If you're already enrolled but you don't invest as much as your employer allows, try to max out your contributions.

If you're able to save more than your 401(k) allows, you don't have a retirement plan at work, or you are self-employed, consider a Roth IRA. Virtually all mutual fund firms will let you open a Roth IRA with just $50 to $100 if you agree to have the same amount transferred directly from your bank account each month.

For most people a Roth beats a traditional IRA. Although your contributions to a Roth aren't deductible, as they are with a traditional IRA, you'll get to withdraw all of your earnings tax-free once you reach age 59 1/2, as long as you've held the account for five years. (You'd owe income tax on your earnings in a regular IRA.) And you can place up to $2,000 a year in a Roth if your adjusted gross income is $95,000 or less for single taxpayers ($150,000 or less for married couples filing joint returns) whether or not your employer offers a retirement plan. With a traditional IRA, you can invest the full $2,000 if you earn $31,000 or less a year ($51,000 or less for couples) or your employer does not offer a plan.

If you are self-employed and earning a steady income, you might also consider making tax-deductible automatic contributions to a tax-deferred retirement account such as a Simplified Employee Pension (SEP) or a Keogh. Consult a tax adviser to see which option is best for you.