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There are other investment plans available, but covering those will go beyond the scope of this book. Moreover, constant changes in tax laws will no doubt create newer plans or modify existing plans so you should always keep on top of new developments to take advantage of possible tax breaks and to assure full compliance with the rules.

As you probably have figured out, the IRS is the law of the land when it comes to retirement plans, which also means that there are plenty of rules and regulations surrounding these plans. For example, the total retirement contribution to all plans cannot exceed the lesser of $30,000 or 25% of one's income and 59 1/2 is the age one can begin withdrawing from most plans without any penalties but by the age 70 1/2 the withdrawals become mandatory and one must begin to take distributions from the retirement plans (save the Roth IRA). There are also laws regarding rollovers between plans, early hardship withdrawals (e.g., to pay for medical expenses), married vs. single contributions, and more.

But for now most experts suggest maxing out on the 401(k) plan and then moving on to Roth IRA if there is more money to be invested for retirement. After that, annuities should be considered. But for most of us, maxing out on 401(k) contributions is challenge enough. And remember that if you have high-interest debt (such as credit card balances) many experts suggest wiping those out before starting a retirement plan.

Retirement will happen sooner or later, and for most of us it sneaks up. Making contributions to a retirement plan does not have to be back breaking. Just do as much as you honestly can and keep it consistent. Remember again that this section only gave a simple summary of some of the retirement plans available to get you started. Volumes can be written (and have been) on retirement plans and the complex laws …