The rarefied tax-free or tax-deferred air of a specialized retirement account gives your little nest egg a chance to grow into a gigantic one.

Some limitations on retirement accounts may be imposed: for instance your workplace may offer a SEP-IRA instead of a Roth 401(k), or you may make too much money to qualify for a Roth IRA. Still, every type of retirement vehicle comes with benefits and perks.

What can you expect to learn from this chapter:

Types of retirement vehicles   The right tools are vital when it comes to saving for retirement. You wouldn't try to bail out a sinking ship with a teaspoon and you shouldn't save for retirement with just any old savings account. Workplace retirement plans help you save   Employers encourage retirement planning by offering opportunities to save, with tax breaks. Roth 401(k)   With a Roth 401(k) option, employees can pay taxes on their contributions now and enjoy the earnings tax-free later. Self-employed 401(k)   Earning big bucks and self-employed? Then this could be the retirement plan for you. Traditional IRA vs. Roth IRA   Though the Roth IRA is the darling of the financial world, the traditional IRA offers its own set of benefits. Simple IRA   Simple IRAs live up to their name. Employers love them and so do their employees. SEP IRA   The Simplified Employee Pension Plan offers flexibility to self-employed workers who want to stockpile money for retirement. Chapter 2 quiz   Test how much you learned about retirement vehicles.