With most traditional IRAs, these events would include: reaching 59½, buying a first home ($10,000 limit), qualified college expenses, qualified medical expenses that exceed 7.5 percent of gross income, paying medical insurance premiums after a job loss and disability. If the account holder dies, a beneficiary can take out money without early distribution penalties.

With a Roth IRA, the account has to be at least 5 years old, and the events could include: reaching 59½, purchase of a first home (limit is $10,000 in earnings), disability and death. But with a Roth, you can also take out your contributions at any time for any reason, without taxes or penalties. It's the earnings on those contributions that are restricted.

When it comes to IRAs, the Roth is king, says Bogosian. Roths are great for people who want to save but don't know exactly what they are saving for. And since you can make withdrawals, "Roths are a good parking spot for your emergency money," Bogosian says.

If you're working past 70½, you don't have to start taking money out and you can keep contributing, says Bogosian.

With a Roth there is also some financial security if you die or become disabled because you or your heirs can start taking disbursements without any penalties, says David Foster, CPA, CFP and principal with Foster & Motley Inc., in Cincinnati.

But once your income starts to climb, Roths are no longer an option. The cutoff range is $95,000 to $110,000 for individuals and approximately $150,000 to $160,000 for married couples, says Bogosian.

There are also limits on the amount you are allowed to contribute every year. If you're starting your contributions later in life, it's more difficult to play catch-up. If you need to put away more than the limit, "then the IRAs are off the table," says Natalie Choate, author of "Life and Death Planning for Retirement Benefits."

With a traditional IRA, you have to stop saving and start taking money out when you hit 70½ whether you're working or not. And if you want to take your money out of a traditional IRA before you retire, you could be subject to taxes and penalties.

401(k)s
When it comes to investing for retirement, a company 401(k) plan can give you the advantage of group buying. "Because of the buying power inherent in these plans, you are able to get better rates; less expensive investments than you or I could on our own," says Bogosian. "You get an institutional price on investments."

If your employer offers a 401(k) program and matches your contributions, you can leverage your savings.

Since 401(k) money is taken out before you see your paycheck, "it's painless," says Picker. "You don't even have to write a check like you do with the IRA."

You can also contribute more, which makes it a great option for those who are starting late. If the individual plan doesn't set limits, you could contribute up to $15,000 in 2006, or $20,000 if you're 50 or older, says Picker.

The 401(k) gives you more flexibility in setting your retirement age. You can stop working (and start drawing on the account) as early as 55. Or you can keep working, continue adding to the account and hold off retirement as long as you want. But you have to keep working for the company that sponsors the plan.