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Most Millennials I know do not have an IRA. This is because it is viewed much like the burning bush: awesome and powerful, but completely mysterious and baffling.

Dafuq Is a Retirement Plan and Why Do You Need One?

For young’uns like us, old age and retirement couldn’t seem further away. And yet the thing about retirement is it goes way smoother if you prep for it in advance. Which is why all of us—yes, even you fresh-faced recent graduates—need a retirement plan.

The term “retirement plan” itself is a bit misleading. It suggests there’s a singular, one-size-fits-all tool for preparing to live out your sunset years in the lap of luxury. In reality, not only is there no one single retirement savings tool that works for everyone, but most people use multiple “retirement plans.”

Join me, dear readers, as I guide you through an entirely-too-detailed tour of the most common forms of retirement plans. Keep your hands and arms inside the vehicle at all times and please don’t feed the wildlife.

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As broke as you are right now, ignoring a perfectly good retirement fund is a terrible idea.

If You Don’t Use Your 401k You’re Losing Money in 3 Different Ways

Too lazy to set up your 401k? Too afraid of the paperwork? Feel like you’d rather use that money on stuff right now? Well buck up, son, because I’m about to tell you why you can’t afford not to use your retirement plan.

A 401k (or 403b if you work for a nonprofit) is your basic retirement fund. You set it up with your employer so they can take money directly out of your paycheck and squirrel it safely away for you to use when you’re terrorizing orderlies in the nursing home. That way you can focus on maintaining your record as Wheelchair Drag Race Champion of Shady Hills Retirement Community and not get distracted by petty financial concerns.

Pictured here: retirement goals.

But the trick is you have to opt into your 401k. It’s not forced on you, and it doesn’t happen automatically. So against your best interest, you can actually choose to just not save for retirement. And as broke as you are right now, ignoring a perfectly good retirement fund is a terrible idea.

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