If your employer offers a 401k plan, it is one of the great vehicles to save for your retirement. Those who are in the public sector, many public sector employers offer 457 Deferred Compensation plans that are similar to 401k plans. Many employers traditionally match your contribution up to three percent of your 401k contributions. Another benefit is some calculate your Federal and State income tax on the balance after 401k or 457 contributions. In 2013, you can contribute up to $17,500 into your 401k or 457 plans and the limit of contribution for 50 years or older is $23,000.

Many 401k plans now offer Roth 401k. Just like in Roth IRA, your contributions will be subject to taxes but your withdrawal will be free of income taxes when you withdraw after meeting all withdrawal requirements. This is a great way to save for your retirement.

If you are maxed out on your 401k or 457 contributions, still you can contribute to a Roth IRA. For 2013, Roth IRA contribution limitation is $5,500 ($6,500 for 50 and older). Roth 401k and Roth IRA may provide a better than traditional 401k withdrawal options in an emergency before reaching all withdrawal qualifications.