It may seem counterintuitive, but one of the first things you need to think about when you start your career is retirement. This is an opportunity to plan ahead so that you can enjoy your hard work when you are older.

Get your free 401(k) money
One of the best ways to plan for your retirement is to invest in a 401(k) plan, which is offered by many employers and has pretty much replaced the traditional pension plan. 401(k) plans are set up by employers and funded by employee contributions. The money you invest in your 401(k) plan is tax-free, and many employers match their employees’ contributions up to a certain percentage (often 5 percent of your salary). Even if your employer matches only a small percentage of your contribution, it is still often more than you could do on your own. It’s a good idea to contribute at least enough to get your full employer match; otherwise you’re leaving money on the table.

IRAs offer tax benefits
You can also take advantage of IRAs, or Individual Retirement Accounts. There are two types of IRAs: traditional IRAs and Roth IRAs. Traditional IRAs also have tax advantages for people saving money for retirement; you can deduct your IRA contribution from your taxable income. You pay the tax on the money when you withdraw it during retirement.

Roth IRAs also have tax advantages, but the advantage comes in retirement. With a Roth IRA, you make after-tax contributions, but when you withdraw the money in retirement it is not taxed. How do you decide which IRA is better? A good guideline is that if you think your taxable income will be higher in retirement (which is likely if you’re a recent college graduate) it makes more sense to invest in a Roth IRA and pay the tax now, when you are in a lower tax bracket. However, it’s always a good idea to consult a financial advisor about your particular situation.

If you have just started your career, retirement may not even be on your radar. But there are great advantages of starting to save for retirement early. First, the more you save, the more you will have later. Second, investing early gives you more freedom to invest more aggressively. This can mean that your investment choices can end up earning you a lot of money, but if an aggressive strategy fails, you will have plenty of time to recover your losses before you reach retirement age.

While it may seem like retirement is a long way away, remember that starting to save early reaps you the most benefits. Come up with a savings plan for retirement that fits your budget and will afford you some luxuries later in life.