There are many ways to save money for your future. You could set up a savings account and put money in there or you could invest in stocks. But when you do all of those things you are taxed right away for trying to save. If you are lucky enough the company you work for will have a 401k plan for you to save through. The 401k will allow you to save and not be taxed until you pull it out. There are many restrictions on when you can pull it out and how much you are allowed to deposit but it is still one of the best ways to invest. Sometimes your place of business will even match what you place in the 401k.
The limit for the amount at which you can deposit will be $15,500 for 2007. This will go up with inflation at increments of $500. When you deposit this amount it reflects on the tax bracket you are in. Say you make $60,000 for the year and you deposit $10,000 in to your 401k plan then you would only be taxed as though you made $50,000. You will incur the tax when you pull it out but you will incur a very stiff penalty, in the form of a tax, if you should pull it out before the age of 59 and one half years of age.
401k's are used by many Americans and is a great way to save. It is never too early to start saving for retirement as many individuals wait to long before they start. Those same individuals then realize too late that they don't have the necessary funds to retire. Don't be one of those and be smart with your future investments.