Employer Plans

• Many employers offer plans that allow you to invest money to accumulate funds for retirement. A common investment vehicle is a 401(k), where you can have money deducted from your paycheck on a pre-tax basis, which lowers your taxable income for the year. You have the choice of a number of options, and the money grows on a tax-deferred basis. Some employers sweeten the pot by matching your contribution up to a certain percentage.
  
  

Annuities

• Annuities are investment products normally sold by insurance companies. You can make payments in regular installments to the insurer or provide it with a lump sum. In return, the insurance company invests the money. When the product "annuitizes," typically when you reach retirement age, you begin to receive regular payments, with the amount based on your age and the total value of the accumulated fund. An annuity may be fixed, meaning your money earns a fixed interest rate during the entire accumulation period, or variable, where your interest depends on the performance of investment vehicles like stocks.
  
  

Health Savings Account

• If you don't have health insurance, a Health Savings Account is a way to get coverage and simultaneously save for retirement. The HSA combines a high-deductible major medical health insurance plan with a savings account. You can withdraw money from the savings account on a tax-free basis to pay for covered under-deductible medical expenses. Otherwise, the money continues to earn tax-deferred interest. When you turn 65 and are eligible for Medicare, you can begin to make withdrawals from the account without penalties, although you will need to pay taxes on the amount.
  
  

Self-Directed Investments

• You can also accumulate money for retirement by developing your own investment portfolio. Investments such as stocks, bonds and mutual funds can provide significant returns over time, although they may not offer the tax advantages of a 401(k) or annuity. If you have a lump sum of money to invest, a bank certificate of deposit is a safe although somewhat conservative way to put money aside. If you own a home, you can sell it when you retire and use some of the profits to help fund your retirement.