401(k) plans are a common employer-sponsored benefit that enables workers to set aside money from each paycheck towards their retirement. The ultimate goal of 401(k) plans is for employees to put their money in a privileged account that will enable it to grow for years to come.

So how do you decide which kind of 401(k) plan is best for you? Very carefully.

Certain programs enable employees to rollover or convert all or part of their funds into different kinds of 401(k) plans or individual retirement accounts (IRAs). These scenarios are a bit more complicated and rely upon what your career choices look like in the near and distant future, as well as the options listed in your employer's 401(k) program.

Taking taxes into account

The most straightforward assessment of choosing between a traditional and a Roth 401(k)—which taxes your money before putting it into your account—boils down to maximizing your tax benefits.

If you are a long way away from retiring, or you anticipate that your tax bracket will be relatively high when you retire, then a Roth plan may be most advantageous because you can pay taxes at a lower rate now, instead of a higher rate in the future. However, if like most people, you predict that your income (and therefore your marginal tax rate) will be lower following retirement, then you will want to stick to a traditional plan, rather than incurring unnecessarily higher tax rates on your contributions now.

There is another important concept to keep in mind. Financial advisors always suggest diversifying your investments in order to reduce your vulnerability to significant losses. The same is true for diversifying your retirement savings in terms of taxation methods. This "tax diversification" can especially come in handy when trying to minimize your income taxes while maximizing your available funds down the line.

How long can you wait?

Another consideration to take into account when selecting a 401(k) plan is how long you can wait before withdrawing from it.

Ideally, you won't have to touch this money until after you turn 59-and-a-half years old. If you take funds out of a 401(k) early, you'll be required to pay a ten percent penalty fee on top of the income tax you initially deferred. Certain exceptions to this fee apply, such as purchasing your first home, paying for higher education for your children or setting off the expenses of a sudden disability. These exceptions vary, though, so double-check your company's stipulations for their program.

If you are hard-out for money and have no other funds available, it is possible to take a loan out against the funds in your 401(k). This isn't the most financially-savvy approach, since you essentially end up paying taxes on the loan amount twice. But this setup helps ensure that you repay everything (including interest) to your account within a certain period of time, thereby safeguarding your retirement. Failing to repay this money within the allotted time means you will be slapped with that pesky ten percent early withdrawal fee.

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Make sure you're aware of your employer's vesting schedule for matching contributions. You don't want to relinquish money you anticipated keeping when you quit or change jobs. Full entitlement to these matched funds relies upon the amount of time you have spent with the company—another incentive for employee loyalty to and longevity with the company. Funds can be vested a certain percentage each year, or all at once after a certain number of years spent with an employer. If you leave before these funds are fully vested, you could forfeit all or part of this money.

One other stipulation to note with 401(k) plans is the required minimum distribution rule. In order to prevent individuals from simply growing their 401(k) funds indefinitely, you must begin making required minimum withdrawals beginning April 1st of the following calendar year in which you turn 70-and-a-half years old or retire (whichever comes later). Neglecting to do so will result in additional tax penalties.

Put money on it—confidently!

Deciding what kinds of investments to participate in is a delicate task, especially for those who are trying to plan for their future care needs while caring for an aging loved one. Few people actually enjoy taking risks with their hard-earned money, so it is important to have a solid understanding of your financial situation and the chances you're willing to take before making any decisions.

Financial opportunities (even beneficial ones) often come with a mass of small print that needs careful evaluation. Whether you pay for financial advice or asset management services or decide to take a completely DIY approach to your finances, you'll still want to monitor your affairs on a regular basis, without obsessing about them. Agonizing over high-risk investments can have a detrimental impact on your health, which could result in less time to spend all of your well-earned retirement savings!