Retirement—it’s not a word you think much about when you’re young. After all, that’s something that happens when you get OLD.

“But what about Social Security?” you might ask. “Isn’t that going that going to be all I’ll need?” Well, since the Social Security system was designed to supplement our other retirement savings, we shouldn’t rely on it entirely.

So how should we save for retirement?

The first thing to do is see if your employer offers a 401(k) program. In a nutshell, a 401(k) is a retirement plan your employer sponsors. Money is deducted from every paycheck, on a pre-tax basis, with the purpose of having it to use when you retire. If you’re lucky, your employer will also contribute and/or match your contributions up to a certain limit. The money is invested for you and earns compound interest, meaning you earn interest on the interest.

When I was young and just starting out in the working world, I wasn’t thinking about my future. I wasn’t planning on being at my first job for very long, so I didn’t see the importance of contributing to a 401(k). Eight years later, when I was still at that same job, I realized that I should have been saving for my old age the whole time. I missed out on eight years of compound interest!

If your employer doesn’t offer a 401(k) program, or even if they do, you should also consider starting an IRA, or an Individual Retirement Account.

Within the realm of IRAs and 401(k)s, you also have the option to invest your money in either a Roth or Traditional. There are a lot of differences between the two, but the biggest difference is how each one gets taxed.

Traditional IRAs/401(k) are pre-tax contributions; you will be taxed when it is time to withdraw funds.

Roth IRAs/401(k) are post-tax contributions; since you have already paid taxes on the contributions, you will receive tax-free withdrawals when you retire.

While your head is spinning looking at all the different ways to save for your future, it’s important to remember that there isn’t any one right way to invest money for your retirement. It doesn’t even take a lot of money to make money. All it takes is some money and a lot of time.

The earlier you start saving, the more time your money has to accumulate interest. The more time you have it invested, the more time you have to figure out what system works best for you.

If you have questions about retirement products, talk to a financial advisor at your credit union. They'll be an excellent source for more detailed information.