To be financially secure in retirement, you have to have your own savings. Social Security can help you make ends meet, but having your own nest egg will give you far more flexibility than you'd have if you relied solely on a fixed income each month.

However, it can be hard to figure out how to save for retirement. You have many options, and some offer big tax advantages. In particular, many investors wrestle with whether to save using a "regular" traditional IRA or 401(k) plan versus using a Roth IRA or Roth 401(k). Below, we'll look at some of the things you'll need to consider in picking the right retirement account for your needs.

Binder marked Retirement Plan, next to pen, glasses, and charts.

Image source: Getty Images.

Are you eligible?

Anyone with earned income from a job or self-employment can contribute to a traditional IRA. Moreover, if your employer offers a 401(k) plan at work, then most employees are allowed to participate in it, whether it's a strictly traditional 401(k) or has a Roth 401(k) option embedded in it.

However, there are income limits for Roth IRAs. Singles who make more than $139,000 in adjusted gross income or joint filers making more than $206,000 in 2020 won't be able to contribute to a Roth IRA. So obviously, if you're not allowed to put money in a Roth IRA this year, you'll want to go the traditional route or use a 401(k) option instead if it's available.

What's your tax bracket?

The biggest consideration in deciding between a Roth or regular retirement account is your tax bracket now and what you expect your tax bracket will be in retirement. In general, if you're in a low tax bracket now, then a Roth retirement account is the smarter choice. That's because being able to get tax-free distributions in retirement will save you more than you'll lose in potential upfront tax incentives by choosing a Roth.

On the other hand, if you're in a high tax bracket now, the upfront deduction you get from a traditional IRA or 401(k) is worth more. That doesn't always mean you should choose a traditional over a Roth in this case, however. Current tax rates are low, and many expect them to rise in time. It's possible that even if your income stays the same or goes down in the future, you'll still be in a higher tax bracket in retirement because of future tax law changes.

Do you want to have to take money out of your account in retirement?

All 401(k) accounts (Roth and regular), as well as traditional IRAs, require that you take money out of them once you turn a certain age, typically 72 under current law. The amount of this required minimum distribution every year depends on the account balance and your life expectancy, but it can force you to pay extra taxes sooner than you'd like.

Roth IRAs don't have a required minimum distribution requirement. You can therefore leave money to grow tax-free as long as you like. For those with financial flexibility, Roth IRAs can therefore be a great way to preserve the ability to tap into retirement savings when you need it.

Have the retirement you deserve

No matter which type of retirement account you choose, setting money aside for the day you're no longer working is important. Regular and Roth IRAs and 401(k) accounts can be a great tool to help you reach your financial destination and have the financially secure retirement you've always dreamed of.