When it comes to saving for retirement in a tax-advantaged manner, you have choices. You can put money into an employer-sponsored 401(k) if your company offers one. And if it doesn't, you can contribute to an IRA as long as you have earned income.

Now IRAs come in two varieties -- traditional and Roth. The upside of saving in a traditional IRA is getting an immediate tax break on the money you put. However, withdrawals are then taxable during retirement.

With a Roth IRA, there's no immediate tax break on contributions. But once you retire, you can enjoy tax-free withdrawals from that account. And at a time in life when money may be tighter, not having to worry about paying the IRS those taxes is a good thing.

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Source Fool.com