If you're looking to invest for your retirement and your employer does not offer an ERISA-qualified reitrement plan, such as a 401k, your best bet is going to be to invest that money in an investment vehicle such as a ROTH IRA. Here is a nice, concise explanation about the difference between a ROTH IRA and a traditional IRA:
A traditional IRA allows you to put pretax money away, let it grow tax-deferred, and withdraw it after age 59½. You have to pay ordinary income tax on the withdrawals. You can't make contributions after age 70½, and at that point, you must start taking minimum withdrawals or face a 50% penalty tax on the amount of money you should have withdrawn but didn't.
In general, if you withdraw money from a traditional IRA before age 59½, you'll have to pay a 10% early withdrawal penalty. The exceptions to this rule are: 1) death, 2) disability, 3) divorce decree, 4) certain medical expenses, and 5) distributions that are substantially equal periodic payments (72(t)). A recent revenue ruling (2002-62) allows you to make a one-time change to the calculation method used for 72(t) withdrawals.
A Roth IRA allows you to put away aftertax money and let it and any earnings grow tax-free, assuming you meet certain criteria. You must hold all earnings for at least five years plus one of the following:
* Attain age 59½
* Be a beneficiary of the IRA
* Be disabled
* Be eligible for a qualified first-time homebuyer withdrawal of up to $10,000
The contribution maximum is the same for Roth IRAs as it is for traditional IRAs ($3,000 or $3,500 for investors over age 50). The income thresholds, however, are higher than they are for traditional IRAs. Singles may contribute to a Roth IRA until modified adjusted gross income (AGI) is more than $110,000. Married couples filing jointly may contribute as long as their AGI is below $160,000. (The thresholds for a traditional IRA are $50,000 for singles and $70,000 for couples filing jointly.) You can contribute past age 70½ as long as you have earned income and are otherwise eligible. You do not have to take required minimum distributions at age 70½.
At your income level, I would take advantage of the tax benefits of the ROTH as long as possible.
If you need assistance in setting up an IRA or have questions about what funds to choose and what to put in your IRA, I would recommend visiting the Motley Fool. They have a great eduational forum on investing and break everything down so it's easy to understand.
www.fool.com
Hope this helps---
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