As you settle into your 50s, you may feel busier than ever before. Trying to juggle your ever-increasing family activities with demands at work isn’t easy. With so much going on, it’s easy to overlook one of your biggest milestones yet to come: retirement. Like it or not, your golden years maybe a decade or less away. In the race to reach your retirement goal, every dollar counts. If you are feeling anxious about your savings or lack thereof—it’s time to be proactive with your taxes.

Make catch-up contributions to your retirement plans  

As you get older, the IRS offers incentives to supercharge your retirement savings. The benefits of doing this are two-fold: more money for retirement and a way to reduce your taxable income.

Once you turn 50, you can make a $6,000 catch-up contribution to your retirement plan every year. This is on top of your regular $19,000 contribution. The following workplace retirement accounts are eligible.

• 401(k)

• 403(b)*

• SARSEP

• 457(b) 

*If you have at least 15 years of service, you may be eligible for another 403(b) catch-up contribution. You can learn more about your contribution limits here.

Don’t worry—there’s a catch-up contribution for individual retirement account (IRA) holders, too. You can deposit an extra $1,000 to your traditional or Roth IRA. Roth IRA contributions won’t reduce your taxable income, but the money will be tax-free in retirement.

Leverage your health savings account (HSA) to save for healthcare expenses

The rising costs of healthcare is one of the inevitable parts of growing older. A couple can expect to spend a whopping $300,000 on healthcare in retirement, according to Fidelity. And that’s not including the potential expense of long-term care. 

If you are eligible, a health savings account (HSA) may be a small way to ease the sting. You can contribute $3,500 as an individual or $7,000 as a family every year. Once you are 55 or older, you can contribute another $1,000.

HSAs offer three separate tax benefits. Your money goes in pre-tax. You can invest and grow the money tax-free. Withdrawals for qualified medical expenses are tax-free.

Know the tax consequences of raiding your retirement accounts early

As you get closer to your 60s, you may be eager to start tapping your retirement accounts. But before making withdrawals, it’s important to understand the tax consequences. 

• IRAs – In most cases, you will have to pay a 10% early withdrawal penalty if you take money out before age 59½. There are some exceptions, like using the funds to pay for health insurance after losing your job. 

• 401(k) – If you make a withdrawal before age 59½, you will have to pay a 10% early withdrawal penalty. There are some hardship exceptions to this rule. 

• HSAs – If you withdraw money for non-qualified medical expenses, you will have to pay a 20% penalty.

Consider working with a financial advisor

As you get closer to retirement, there is a lot more at stake. You may be eager to make sure there is enough money for retirement. Or, you may want to start talking about your legacy. Either way, it’s a good time to consider working with a financial planner. With the proper guidance, you will be well on your way to a more secure financial future.

Suggested Readings:

• 5 Best Financial Decisions in your 50s

• How does healthcare impact my taxes?

• How Retirement Impacts Your Taxes