When it comes to investing for retirement, there are several types of accounts you can choose from. But if you’re young, experts say a Roth option can be especially smart to start with.

“Typically, the younger you are, the more a Roth makes sense,” says Patrick Huey, certified financial planner and owner of Victory Independent Planning in Portland, Oregon.

Unlike a 401(k) or traditional individual retirement account, which are funded with pre-tax dollars, Roth 401(k)s and Roth IRAs are funded with money that’s already been taxed. In exchange, your investments grow tax-free, and once you reach age 59½, you won’t owe taxes or penalties on qualified withdrawals.

Though you can’t predict the future exactly, Huey says, “you have to look at the way things typically progress and plan accordingly.” As you get older, you tend to move into higher-paying roles, and thus, higher tax brackets.

A Roth account generally gives younger investors the ability to avoid those higher taxes in the future by paying taxes now while they’re in a lower bracket, Huey says.

Additionally, because the stock market has historically trended upward and young investors will likely hold onto their investments for decades, Roth accounts generally allow you to keep more of your earnings, Huey says, since withdrawals from a traditional 401(k) or IRA are taxed as ordinary income.

“Financial planning is not about knowing; it’s about making educated assessments,” Huey says.

If your company has a Roth 401(k) option, start there, say both Huey and Jaime Bosse, a certified financial planner and senior advisor at CGN Advisors in Manhattan, Kansas.

A Roth 401(k) is an employer-sponsored, after-tax retirement account with no income limitations. Bosse says they’re typically the easiest to manage because you can elect the percentage you want to contribute ahead of time and contributions are automatically taken out of your paycheck.

Furthermore, your company may match up to a certain percentage of your contributions — “free money” you should take advantage of, Bosse says.

You can contribute up to $23,500 in 2025 and $24,500 in 2026 to 401(k) plans. Those 50 and older can contribute an additional $7,500 this year and $8,000 in 2026 in catch-up contributions, while investors aged 60 to 63 can instead contribute up to $11,250 as a catch-up contribution.

If you work for yourself, your company doesn’t have a Roth 401(k) option or you have money left over, consider contributing to a Roth IRA, Bosse says.

A Roth IRA is an individual account you open on your own, though eligibility starts to phase out at higher income levels. You can contribute up to $7,000 in 2025, and $7,500 in 2026, and investors 50 and older can contribute an additional $1,000 this year and $1,100 in 2026 in catch-up contributions.

Roth IRAs allow you to withdraw contributions, but not earnings, at any time without taxes or penalties, giving you more flexibility in case of emergencies. Though Roth 401(k)s sometimes offer loan options, they generally have stricter early withdrawal rules. Withdrawals before age 59½ may incur penalties and earnings can be taxed as ordinary income.

Whether through a 401(k) or IRA, the earlier you start setting aside money for retirement, the more it has time to grow, Bosse says. It’s also smart to talk to a trusted financial professional who can help you figure out the best account for your individual situation.

And if you can, automate your contributions, so you don’t have to actively think about moving money around every month, she says.

“When you’re in your 20s, the potential is huge,” Bosse says. “Any extra dollars you have should be invested in growing for the future.”

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