RetirementSavingsOptionsSaving for retirement can be confusing—and even a little intimidating—yet it’s utterly essential. Though nearly every financial professional recommends opening a retirement savings account as early as possible, the myriad options and often-confusing financial terrain can cause many people to procrastinate.

It used to be simpler. In 1970, 42 percent of Americans had a defined-benefit pension plan provided by their employer that guaranteed they would receive a portion of their salary and benefits upon retirement. But as Americans began living longer and global markets fluctuated, it became more expensive for businesses to provide these kinds of pensions.

In the late-1970s and early-1980s, businesses introduced the 401(k) as an alternative retirement savings plan. During the next 35 years, a variety of retirement investment accounts popped up for employees, even as the number of pensions declined sharply.

The range of retirement savings vehicles can make your head spin, but it’s not impossible to grasp the basics. Some of the most common account types include the 401(k), the traditional IRA, and the Roth IRA.

“A true retirement account will have a variety of tax consequences, which is where the major differences come in,” explains Jessica Merino, a financial advisor with Jensen & Associates, an Ameriprise wealth advisory practice. “Generally speaking, the major differences include who can contribute, how much they can contribute, and the tax benefits and consequences upon deposit and withdrawal.”

Types of retirement accounts

401(k) accounts are employer-sponsored plans in which the employer determines how to contribute—typically through a payroll deduction—and also chooses the plan provider and investment options. The IRS limits an employee’s annual contribution to a 401(k) plan to $18,000 in 2015; those aged 50 and older can contribute up to an additional $6,000. Many employers also offer a matching benefit or additional profit-sharing contribution to their employees’ 401(k) plans. Contributions and interest accrual to 401(k) plans are tax-deferred, with withdrawals on the funds 100 percent taxable.

There are typically two types of individual retirement accounts (IRAs) that Americans encounter: : traditional IRAs and Roth IRAs. Both types of IRAs cap contributions for 2015 at $5,500, or $6,500 for people 50 and older, but Merino notes that the main differences are in the tax consequences.

“Traditional IRA contributions are made pre-tax, the balance is tax-deferred, and withdrawals are taxable,” Merino explains. “Roth IRA contributions are made after tax, the balance (and interest accrued) is tax-deferred, and withdrawals are tax-free.” The IRS has rules about who can contribute to which plans and how much can be contributed based on income and whether the person has an employer-sponsored plan.

Who manages your investments

Retirement plans accrue interest and grow from investments. As noted, most employers will choose their 401(k) plans’ investment options, which are typically a variety of different mutual funds. Employees then usually pick their investment options from an employer-provided list. IRAs have investment options provided by the institution where the investor opens the account, and they can include everything from mutual funds to individual stocks to real estate—and more. The financial institution with which you open your retirement accounts should have financial planners to assist you in choosing investments.

For most traditional full-time employees, an employer-sponsored 401(k) or IRA account is ideal for setting up retirement savings, even during the first step of a career, says Merino.

“Sometimes, individuals who are earlier in their careers delay 401(k) contributions. If employers offer a match, that’s free money that you’re missing out on,” she says.

Getting started on retirement savings

Starting early with an employer-sponsored plan doesn’t mean you’re locked into a job, though, and it’s not difficult to balance career mobility with consistent retirement savings, as long as you’re attentive.

“Some companies […] have vesting periods, which is an amount of time that you need to work for a company to receive the match, so pay attention to this,” says Merino.

“Sometimes waiting a month or two to leave a company could be the difference between receiving the match in your account or losing all or part of it.”

Options for freelancers and those in nontraditional jobs

Recent economic rockiness means more people than ever are working nontraditional jobs, either part time or freelance. Women in particular are more likely to work part-time jobs that don’t qualify for a retirement plan or to interrupt their careers to take care of family members. In fact, according to the U.S. Department of Labor, only 45 percent of the 62 million working women nationwide participated in a retirement plan, even though they’re expected to live 20 years past retirement age on average.

Merino advocates that anyone without an employer-sponsored plan look to IRA accounts. You can open either a traditional or Roth IRA, or both, but Merino warns that the maximum of $5,500 in contributions applies to all IRA accounts. This means if you had a traditional and a Roth IRA, you’d have to split the total $5,500 contribution between them—though how it’s split is up to you.

Freelancers subject to 1099 income tax forms have other options as well because they’re considered self-employed.

“At this point, you have additional small business retirement plans available to you. There are a number of different options, and these accounts allow you to contribute more,” she says. “But they can be more complicated, with additional fees, record keeping, and tax reporting.”

Regardless of which plan you choose, Merino says the most important thing is to start saving as early as possible. If you’ve put off retirement investments, this means starting now and learning as much as you can about what you will need in your golden years. If you’re not ready to speak to a financial professional, the Consumer Financial Protection Bureau (CFPB) offers an online Planning for Retirement tool that can you better understand Social Security benefits; how to start the retirement conversation with your family and loved ones; and how to make decisions that are relevant to your unique situation.

“There’s no better time than the present, no matter what your age,” she says.