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To get the most for your retirement savings, you have to leverage tax-advantaged retirement savings accounts fully. The 401(k) plan is perhaps the most popular retirement savings vehicle. Designed to let you put aside a percentage of your income for retirement, the contributions are tax-deferred and grow on a tax-deferred basis. Once your account reaches retirement age, you can take distributions, paying no tax on the distributions.

The 401(k) plan, under its name, does not allow you to withdraw a portion of your savings early to spend, but it does allow you to withdraw money before for a variety of reasons. If you want to put your savings in the bank and use it as security to buy a home, for example, you can take a lump sum.

In addition, you can transfer your 401(k) account to an IRA in the early years of retirement. Another tax-advantaged plan is a 403(b) plan where your contributions are tax-deductible and grow. Whereas contributions to a traditional IRA are not tax-deductible, contributions to a 403(b) plan are not taxed up until your first withdrawal. This type of plan offers you the flexibility to select the individual retirement accounts (IRA) from which you would like to withdraw your money to pay for qualified medical expenses. The tax-free growth on this type of plan is another essential benefit of the 403(b) plan.

If you are over 50 and are drawing a check from an employer-sponsored retirement plan, you likely qualify for a retirement savings account that offers you an immediate tax deduction. You could set aside as much as $5,500 a year ($6,500 if you are over 50). This will be a nice boost in your take-home pay.

If you are in a low tax bracket, you can save in an IRA and pay no income tax on the distributions. But if you earn too much, you can expect to pay a 10% federal income tax penalty on the earnings and a 3.8% additional tax on the amount of the distributions.

Actively managed mutual funds can be insufficient for retirees because it takes a lot of time and effort to select investments. With low-cost index funds, you can invest in stocks and bonds without worrying about the burden of performance management or picking winners. Low-cost index funds have done the work for you. These investments tend to rise in value.

Plan participants should be vigilant and aware. According to an article on the NASDAQ site, an average active fund typically charges 1% to 1.25% for annual management expenses, and an average passive fund has costs below 0.25%.