You're listening to Life Kit from NPR.

Hey, it's Mariel.

Tax Day has passed, so you don't have to think about your taxes for another year, right?

Nah, that's wrong.

You could be making better choices now that'll save you money in taxes in 2026,

like putting some money into a retirement

account. The taxation of retirement accounts is probably the most misunderstood concept of investing.

And what I hate is that it creates this real roadblock to people getting started.

This is Amanda Holden, financial educator, an author of the book, How to Be a Rich Old Lady.

Now, the thing is, many of us were never taught how to do all this.

And even if we know a little bit about it, the details get complicated.

What we know is that tax law in the U.S. is like this haunted patchwork doll that has been added to and amended over time. And you can think of retirement accounts as just one cursed limb of the creation. Boogie. But don't worry, on this episode of Life Kit, I'm going to walk you through this. We will talk about

how retirement accounts save you money on taxes, what the two main types of accounts are,

and why it often doesn't matter that much which one you prioritize. That's after the break.

As a financial educator, Amanda is constantly getting this question.

What's better? A 401k or a Roth IRA? Her answer?

All retirement accounts are good.

Retirement accounts are basically bank accounts that hold investments.

And one reason everybody's always telling you to put money in them is that the stock market allows you to generate much higher returns than if you just put your savings in a regular bank account. This is former Planet Money co-host, Mary Childs.

As the economy around you is growing and more transactions are happening and businesses are growing.

Stocks are going to be going up and you want to be a part of that.

You don't want to get left behind.

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