38% of Gen Zers Invest in This Account. Here's Why You Should, Too

When you're young, saving and investing for retirement may be the last thing on your mind. At that stage of life, you may be busy trying to build an emergency fund, pay off your credit cards, and figure out how to advance your career.

But the reality is that if you're in your 20s, you have a prime opportunity to build yourself a nice retirement nest egg. That's because the longer you give your money to grow, the larger a balance you might end up with.

Now, when it comes to saving and investing for retirement, you have choices. If you work for a company that offers a 401(k) plan, you may be motivated to participate in it -- especially if your employer offers a matching incentive. But if you don't have access to a retirement plan through your job, your next best bet may be to open an IRA.

IRA accounts come in two main varieties -- traditional and Roth. And recent data from Empower shows that 38% of Generation Z considers a Roth IRA a top investment vehicle. Here are a few reasons it pays to save for retirement in one of these accounts.

1. Tax-free gains and withdrawals

You don't get a tax break on the money you put into a Roth IRA. Instead, you get to benefit in the form of tax-free investment gains in your account, and tax-free withdrawals from your account. The latter could be a really huge perk in retirement.

Many seniors find that money is tight once they stop working full time. Getting to take money out of your savings without an associated tax bill could ease a lot of your financial stress later in life.

2. No RMDs

If you save for retirement in a traditional retirement plan, you'll generally be subject to required minimum distributions, or RMDs. These force you to remove a portion of your plan balance every year once you reach a certain age or otherwise risk penalties.

So why do RMDs exist? The money in any sort of IRA or 401(k) gets to enjoy tax-advantaged growth. The IRS is fine with you getting that benefit if you're using your savings to fund your retirement. But the IRS doesn't want IRAs and 401(k)s to become wealth-transferring vehicles -- at least not primarily. So by imposing RMDs, the IRS forces retirees to spend down their savings.

Roth IRAs, however, do not impose RMDs. So if leaving wealth behind for future generations is something that's important to you, a Roth IRA gives you that option.

3. Back-up emergency savings

Your Roth IRA should absolutely not serve as your emergency fund. Rather, you should sock away money in the bank for that purpose.

But sometimes, things happen. Let's say you built a $10,000 emergency fund, only your home ends up needing a $12,000 repair. Even though you were diligent and saved well, you're at risk of debt.

Because you don't get a tax break on Roth IRA contributions, you can withdraw your principal contributions (not the gains portion of your account) without penalty at any time. This doesn't mean you should simply tap your Roth IRA whenever a need for money arises. But if you find yourself in a truly desperate situation, you should know that you have the flexibility to access your Roth IRA.

It's a good idea to explore your options when it comes to finding a home for your retirement savings. But for these reasons, a Roth IRA is one account that's definitely worth considering.