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We often dream of retirement as a time when we can live where we want and spend time how we like. And then we think about funding that dream. But making that dream a reality starts with facing the financial facts and setting up a plan. When considering which savings vehicles to use to provide for your future, it is important to understand your options.

You’ve probably heard of the most popular types of retirement savings accounts — IRAs, Roth IRAs and 401(k)s. 401(k)s, or employer-sponsored retirement savings plans, can be a helpful tool for building your nest egg. But there are many different kinds. Check out the different types below so you can choose the right one for you.

Traditional 401(k)

The most common type of 401(k) offers a lot of flexibility, allowing eligible employees to make pre-tax contributions deducted directly from their paycheck. Employers can make contributions, provide a match, or do both. Employer funding may be subject to a vesting schedule. Employees can contribute up to $18,000 a year (an additional $6,000 a year for those age 50 and over).

SIMPLE 401(k)

Savings Incentive Match Plan for Employees 401(k)s — more commonly known as SIMPLE 401(k)s — are available only to companies with 100 or fewer employees who made at least $5,000 from the employer in the previous year. They can be a good choice for small business owners to offer their employees. The employer makes fully vested contributions but cannot offer any other retirement plans. Employees can contribute up to $12,500 in 2015 (an additional $3,000 if the employee is age 50 or older).

Solo 401(k)

Sometimes referred to as an individual 401(k), a one-participant 401(k) or a Uni-k account, the solo 401(k) savings plan can be a good choice if you are self-employed. Many of the same contribution limit and distribution rules of a traditional 401(k) account apply, but you can only open this account if you have no employees or your only employee is your spouse. You effectively act as both the owner and primary contributor of the account.

Roth 401(k)

This option brings the benefits of the Roth IRA into employer-sponsored programs. Roth 401(k)s let you use after-tax dollars as opposed to more traditional options that use pre-tax dollars. You pay taxes now instead of when you withdraw from the account in retirement, meaning you do not owe on the distributions or investment gains.

Understanding the different types of 401(k) plans available can help you find a savings vehicle that works best for you. You may want to consult with your employer or financial analyst to help you choose the option that is right for you.

When trying to save for retirement, it’s also important to take stock of the drains on your income like debt. This may be holding you back since debt can cost you tens of thousands of dollars over the course of a lifetime. The best thing you can do for your financial health is make a plan and pay these debts down aggressively. If you need some extra motivation, crunch the numbers for how much you pay in interest over time versus the returns you could be earning in a retirement account or other investment.

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