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What do I need to know about contributing money to an IRA vs. a 401(k)? Also, I thought that if I have a 401(k) plan at work that I could not contribute to an IRA as well. -- J.K.

IRAs and 401(k)s : Traditional, Roth, conversions, rollovers... Saving for retirement can be a confusing process. But where you stash your cash can make a huge difference when you're ready to enjoy your golden years.

Welcome to Retirement Savings

We all know that saving for retirement is a very big deal, but let's face it: Retirement accounts can be intimidating. With no fewer than 11 different kinds of IRAs out there, it can be compelling to just put off setting up your retirement accounts for another day. That's a mistake, according to Stuart Ritter, a certified financial planner at T. Rowe Price ( TROW). Ritter says retirement savings should start "as soon as you have earned income -- as soon as you enter the workforce."

How much should you save? Ritter and T. Rowe Price put that number at 15% of your gross income. That's the savings rate they've found makes the most sense for most people, and over the years it will pretty much guarantee that you'll pull in a decent income each year after you retire from the workforce.

How to Make a Smooth Transition Into Retirement

Why Retirement Accounts Matter

There's saving for a rainy day, and then there's saving for retirement. While you should do both (see " Creating an Emergency Fund "), the retirement savings are going to be less painful to stash away.

Ritter says, "401(k)s and IRAs give you tax benefits for using that money for retirement." In other words, putting retirement money in retirement-focused accounts will save you money come Tax Day. But which retirement account should you use?

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