Roth IRA's

The primary advantage of a Roth IRA is that you make after-tax contributions—so when you withdraw that money in 20, 30, or 40 years, it’s tax free.

This year you can contribute up to $5,000 ($6,000 if you’re over 50) to a Roth or traditional IRA. With a traditional IRA, you get a tax break now—but you’ll owe taxes when you start withdrawing that money.

Bottom line: If you expect to be in a higher tax bracket when you retire—or you want a portion of your nest egg to be tax free—make a Roth part of your plan.

And remember: In many cases, you can open and fund a Roth in addition to your 401k.