Graduating college means starting your career — and it’s also the best time to start saving for retirement. The earlier you begin, the easier it is to build wealth. Two of the most common ways to save are through a 401(k) and a Roth IRA.

Here’s what they are, why they matter, and how to use them to your advantage.

What to do with your retirement fund


What is a 401(k)?

A 401(k) is a retirement savings account offered through your employer. Money is taken directly from your paycheck before taxes, which lowers the amount of income you pay taxes on today.

Why it’s powerful:

  • Tax savings now: Contributions reduce your taxable income
  • Employer match = free money: for wants (entertainment, travel, lifestyle upgrades)
  • Automatic saving: Deductions come straight from your paycheck

How to get started:

  1. Ask HR if your company offers a 401(k).
  2. Sign up and choose how much of your paycheck to contribute.
  3. Contribute at least enough to get the full employer match — that should always be your first goal.

401ks


What is a Roth IRA?

A Roth IRA is a retirement account you open on your own at a bank or brokerage. You contribute after-tax money(money you’ve already paid taxes on), but the big benefit comes later: when you retire, your withdrawals are tax-free.

Why it’s powerful:

  • Tax-free withdrawals later: Great if you expect to earn more (and be in a higher tax bracket) in the future
  • Independent of employer: You can open one even if your company doesn’t offer a retirement plan
  • Flexible investment options: You pick where your money is invested

How to get started:

  1. Pick a provider (bank, credit union, or brokerage).
  2. Open an account online in minutes.
  3. Contribute regularly — even $50/month adds up over time.

Roth IRAs or 401ks


Which Should You Choose First?

For most new grads:

  1. Start with your 401(k) — contribute enough to get the full employer match (free money + tax break).
  2. Then add a Roth IRA — for tax-free income in retirement.
  3. If you can save more, go back and increase your 401(k) contributions.

This strategy lets you benefit from both tax savings today and tax-free money later.


How Troutwood Helps

  • Visual tools: See how much your savings could grow over time.
  • Match modeling: Understand how much your employer match adds to your account.
  • All accounts in one place: Link your 401(k), Roth IRA, and checking/savings in the Troutwood App.
  • Clear education: Conflict-free resources to help you make confident financial choices.

Key Takeaway

The best time to start saving for retirement is now. Capture your employer’s 401(k) match first, then build tax-free retirement income with a Roth IRA. Starting early means your money has decades to grow — and Troutwood is here to help you along the way.



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