If you haven’t started planning for retirement, you certainly aren’t alone. Around one in three Americans have fewer than $5,000 saved for retirement, according to Northwestern Mutual’s 2018 Planning & Progress Study. On top of that, a full 78 percent of Americans say they’re “somewhat” or “extremely” worried about not having enough money to retire. As a nanny, you don’t have access to a 401K or the typical retirement benefits that accompany a corporate job, but that doesn’t mean you have to be sans savings or dreading the financial stress of your retirement years. Here are some practical tips to help you take matters into your own hands and start prepping your finances for smooth sailing in the future.

How much to save

How much you should save for retirement will depend on a number of factors, like where you plan to retire, when you start saving, your spending habits, and whether or not you have children. At Westside Nannies, we typically recommend that nannies save around 15 percent of their income for retirement. This retirement IQ calculator can help you determine a reasonable amount to set aside each month based on your unique circumstances.

What type of retirement account to choose

There are a number of different ways to save retirement, but the two most common options are the traditional IRA and the Roth IRA. IRA stands for individual retirement account. These two types of accounts function in similar ways. You are allowed to contribute up to a certain amount each year (for 2019, the contribution cap is $6,000 for those under 50 and $7,000 for those 51 and older), and your contributions gain interest over time.

The two major differences between the two are the income eligibility requirement and how taxes are taken out. Anyone can qualify for a traditional IRA, but to qualify for a Roth IRA, you must make less than $193,000 annual gross income if married and filing taxes jointly, and less than $122,000 annual gross income if single or filing separately from a spouse. The tax advantage of a traditional IRA is that contributions are tax-deductible in the year they are made. With a Roth IRA, contributions are not tax deductible in the year they are made, but withdrawals during retirement are not taxed.

Some families may choose to make a contribution to a nanny’s IRA account as a part of the nanny’s income, a benefit, or as part of an annual bonus. These contributions should be reported to the IRS by the family as a part of your income.

Employers also have the option of setting up a Simple IRA or an SEP-IRA. A simple IRA allows small employers to set up IRAs for employees and either match employee contributions or make unmatched contributions. An employee can contribute up to $13,000 in 2019, with an extra $3,000 allowed for those over 50. An SEP-IRA, or simplified employee pension IRA, is an IRA that is fully funded by the employer. They can contribute up to 25 percent of your income or $56,000 in 2019, whichever is less.

With both the Simple IRA and SEP-IRA, employers must offer equal benefits to all of their employees and be willing to make significant contributions. Because household employers don’t get the same tax breaks that business employers get when it comes to contributing to their employees’ retirement accounts, it’s more likely that you will be responsible for setting up and managing your own retirement accounts using either a traditional or Roth IRA. To set up an account quickly and easily, Westside Nannies recommends Vanguard.com, as it’s really simple to use and understand.

When to start saving

It is never too late or too early to start saving for retirement. Financial expert Dave Ramsey notes that even if you don’t start saving until you’re 40 years old, you can still set aside a six-figure sum for retirement just by putting away the standard 15 percent and being wise about your accounts and investments. If you’re younger than 40, you have that much more of a head start on saving.

Even if you can’t afford to save 15 percent of your income right now, every little bit helps. You can start by saving small sums from each paycheck–$25, $50, $75–and progress to larger sums as you build your skills, experience, and income. You could also plan to save and invest bonuses. The bottom line is: start now. Any small bit of preparation you can do today will save you a lot of financial stress tomorrow.