Financial experts say you should plan for your retirement but as soon as you start trying to figure it all out, you're bombarded with terms, explanations, calculations and a sense that nobody really knows the answers to the questions you have.

Basically, you're right. Retirement planning is an inexact science based on variables that continually change as you age and move through different phases in your career. The basics, however, aren't hard to grasp.

Two Basic Types of Retirement Plans

The most fundamental question is whether your employer still offers an old-style pension plan or some other type of retirement vehicle.

Defined-Benefit Plan – Most commonly known as a pension, the defined benefit plan probably won't cost you anything. Your employer won't take any money from your paycheck. As you work, a specified amount of money from your employer funnels into your pension. When you retire, you receive a paycheck based on your earnings during your tenure at the company.

The only bad thing about this is that most pension plans are a thing of the past or so small that it's impossible to retire comfortably without other s of income. If your employer still offers a pension, congratulations.

Defined-Contribution Plan – Better known as a 401(k), 403(b) or IRA, defined-contribution plans receive a certain percentage of your paycheck and invest the money into investment vehicles of your choosing. Your employer may also match your contributions up to a certain amount. Because these plans rely on the individual to manage the account, problems have emerged. Recent data show that 60% of Americans have less than $25,000 saved for retirement and only 44% have tried to calculate how much money they will need to live comfortably.

You can have both a defined-benefit and a defined-contribution plan, but you can only contribute a certain amount each year to all accounts combined.

Roth vs. Traditional Plans

IRAs and 401(k)s come as a Roth or traditional plan. A Roth plan requires that you pay taxes on your contributions upon deposit – in other words, you put after-tax income into a Roth. If you want to pay no taxes on your contributions until you start taking distributions, you want the traditional plan, which you fund with pre-tax income.

If you think your tax rate is lower now than it will be in the future, set up a Roth plan. If you believe you'll pay fewer taxes later, choose the traditional plan. See Roth IRA Vs. Traditional IRA and 401 (k) Plans: Roth Or Regular? Note that there are income limitations on which taxpayers are permitted to open Roth IRA accounts (but not Roth 410(k)s) – as well as a back-door IRA strategy to open one later.

What Is Vesting?

Your employer wants you to stick around for years to come. Vesting gives you a reason to stay. Although your individual contributions to your retirement accounts are 100% vested as soon as they reach your account, if your employer matches those contributions or gives you company stock as part of your benefits package, it may set up a schedule under which a certain percentage is handed over to you each year until you are "fully vested." Regulations depend on which type of program your company has. A SIMPLE IRA, sometimes available at small companies, vests immediately, however (see Benefits Of A SIMPLE IRA).

Beware: Just because retirement contributions are fully vested doesn't mean you're allowed to make withdrawals. You have to be over 59½ or meet other requirements or you'll owe a 10% penalty. (If you do want an retirement savings vehicle that you can also use for emergency cash, open a Roth IRA. See How To Use Your Roth IRA As An Emergency Fund.)

The Bottom Line

Figuring out all the terms and strategies that come with planning your retirement is no easy task but Investopedia has plenty of res that can help you. For starters, see our Retirement Planning Basics and Consolidating Your Retirement Money tutorials.

Also involve a fee-only financial planner who can evaluate your individual financial situation and create a retirement savings plan that will allow you to retire comfortably while reaching your other financial goals.