The government realizes that tax time makes it hard for the average American to save money for his or her retirement. The IRS brings the economically savvy individual a plethora of tax deferred savings plans — like 401ks, IRAs and annuities — to make valuable dollars stretch well into one’s golden years.

There are many types of tax deferred savings. The most common is a 401k. The 401k employee retirement plan offers high maximum contribution limits and the opportunity to save interest over time. Just be sure to follow 401k withdrawal rules and understand that you’ll have to pay taxes on the lump sums you take out.

If you leave your place of employment before an appropriate retirement age, you will need to pay taxes and a penalty at that time — or roll your money over into an IRA. An Individual Retirement Account (or an IRA, for short), allows you to set aside thousands of dollars for your retirement, albeit less than a 401k.

You will not have to pay taxes on the income until after age 59 1/2. You can look into all different types of IRAs to see which one you qualify for, including: a Spousal Retirement IRA, Deductible IRA or Roth IRA. With both 401ks and Deductible IRAs, you only pay taxes when you start withdrawing at retirement.

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