Make good use of tax-advantaged accounts
Prudent investors recognize the importance of using tax-advantaged accounts to save on taxes. Experts suggest that if you foresee your income in retirement will be higher than what it is at present, it would be a fantastic idea if you contribute to a Roth IRA or Roth 401(k). Doing so will allow you to pay your taxes upfront and withdraw money tax-free at a later date. On the other hand, if you anticipate your income to reduce in retirement, a contribution to a traditional IRA or 401(k) would be more useful. Here you will not pay taxes on contributions, but pay them on withdrawals during retirement.