If you’re a Millennial, two of the retirement savings options available to Americans are particularly good for you. The decades before you’ll need the money means you don’t have to save that much to end up with a sizeable fund down the road. Look at these two options.

The first good bet is a Roth IRA. This tax-advantaged savings plan is available to anyone with earned income who meets certain income standards that are probably easy to meet early in your work life (for example, a single person has to earn a modified adjusted gross income of $129,000 in 2014 to be disqualified).

You can contribute up to $5,500 in after-tax income to a Roth IRA for 2014, and the limit usually increases every couple of years to account for inflation and higher costs of living. If you’re just starting to work or you were unemployed for part of the year – and your taxable compensation was less than $5,500 – the most you can contribute to a Roth IRA for the year is your total taxable compensation. So if you earned $4,000 for the year from a part-time summer job, the maximum you can put in is $4,000.

Saving for retirement through a Roth IRA is a great idea because you can invest your contributions and watch them grow tax-free. The tax break on investment gains helps your nest egg grow larger, faster. Also, when you start taking distributions from your Roth IRA in retirement, you won’t pay any taxes on the money you take out, since you already paid taxes on your contributions during your working years. If your Roth IRA balance is $1 million when you reach retirement, that entire $1 million is yours; none of it belongs to the government. Saving and investing in a Roth IRA makes it easy to see how much money you’ll have to work with in the future.

Another great feature of a Roth IRA is that you can withdraw your contributions (but not the income they earned) at any time without penalty. You can sock money away now without fearing what you’ll do if you need it later. If you do need the money later, you can get it back. In fact, a Roth IRA can make a great emergency fund. If you don’t need the money later, you’ll have a great start on saving for retirement.

401(k) or 403(b)

The second great retirement plan option for Millennials is a 401(k) plan or, if you work for a tax-exempt organization, a 403(b) plan. If your employer matches part of your contributions, you should take advantage of this “free money” by contributing enough to your 401(k) or 403(b) to get the match.

The way many plans work, your employer will match your contributions up to, say, 5% of your salary. So if you contribute 3% of each paycheck to your plan – let’s say that amounts to $600 – your employer will kick in $600; if you contribute 5%, amounting to $1,000, your employer will contribute $1,000. However, if you contribute 10%, amounting to $2,000, your employer will still contribute $1,000, since 5% is the maximum match. Companies are free to set their own policies on how much to match, so your employer may offer more or less than a 5% match, or it may not offer a match at all.

Even if your employer won’t match your 401(k) or 403(b) plan contributions, these plans are still a great choice. Since your contributions come out of your paycheck automatically, it’s a painless way to save. It requires no effort on your part beyond signing up for the plan; some companies even enroll employees automatically. Also, you won’t feel the sting of setting aside money since it will never enter your bank account.

Unlike Roth IRA contributions, 401(k) and 403(b) contributions are made with pre-tax dollars. You’ll pay less income tax now, but you will have to pay tax when you take money out at retirement. This feature can make it a little trickier to tell how much you’ve really saved, since you can’t predict what tax rates will be or what tax bracket you’ll be in decades from now when you’ll withdraw the money in retirement.

The Bottom Line

Contributions to a 401(k) or 403(b), like those to a Roth IRA, grow tax free, which helps your nest egg increase faster than it would in a non-retirement savings account where you owe tax every year on the interest it earns. Whichever plan you choose, the important thing is to start early. To explore this topic more, read How Gen Y Can Avoid Working Forever and Retirement Planning The Millennial Way .