Retirement savings by age chart

These are employer-sponsored, tax-advantaged plans for retirement savings.

How much should i have saved for retirement by age 55

You fund these accounts by having money automatically pulled out of your paycheck. Then that money is invested so it can grow into a retirement nest egg.

The main difference between a 401(k) and a 403(b) is that 401(k) plans are offered by for-profit companies and 403(b) plans are offered by government and nonprofit organizations.

Two of the most common types of 401(k) and 403(b) plans are traditional and Roth.

With a traditional, you invest pretax dollars (and that lowers your taxable income now). When you take money out in retirement, you pay taxes then—on the amount you and your employer contributed as well as the growth.

With a Roth, you invest after-tax dollars (that means you pay taxes on that money now).

When you take money out in retirement, you don’t pay taxes on your withdrawals or the growth—but you are responsible for taxes on the amount your employer contributed.