If you have a 401(k), 403(b), or governmental 457(b) plan and your employer offers a matching retirement contribution, take full advantage of it. In addition to receiving the company match, you get the added potential benefits of any tax-deferred growth and compounding returns.

Let's say, hypothetically, your company offers a match of 50¢ on every $1 you contribute, up to 3% of your salary. If you make $60,000 a year and contribute 3%, or $1,800, and your company kicks in another $900, your annual contribution could add up to $2,700. Assuming a hypothetical compound annual growth rate of 7%, your savings could grow to more than $37,000 in ten years.²

Contribute the maximum to your workplace savings plan.

Saving just 3% a year is probably not enough to generate the savings you will need to retire, which could be hundreds of thousands of dollars or more for even basic expenses. So, try to contribute the maximum to your workplace savings plan each year. For 2015, the maximum is $18,000; $24,000 if you are age 50 or older. If you’re not quite saving to the max yet, consider increasing your savings rate by 1% per year until you reach a total savings rate of 15%. For details, read Viewpoints: “Just 1% more can make a big difference.”)

If you think your tax rate will be higher in retirement, consider opting for a Roth workplace savings plan, if your employer offers one. With a Roth, you contribute after-tax dollars, but any earnings and dividends grow tax free, and withdrawals are also tax free if taken in retirement. To learn more, read Viewpoints: “Roth or traditional IRA or 401(k)—two tips for choosing.” Also, new legislation has made in-plan Roth conversions easier.

Pay down high-interest debt.         

If you are paying more than 8% to 10% on credit card or other debt, consider using any extra savings to pay down the balance. If you have multiple accounts, you should work on the one with the highest interest rate first. Continue to make the minimum required payments on other debts (so you don't get hit with any penalties). When that first debt is paid off, consider putting your extra money toward paying off the one with the next-highest interest rate, and so on.

As you pay off your debts, it should become easier to pay off the remaining debts, because you’ll have lower interest payments and therefore more money to work with. Continue the process until you're out from under all your high-interest debt. For debt you cannot pay off, consider consolidating it into a low-interest single credit card or home equity loan at whichever institution offers you the lowest rate, making sure the payment schedule matches your own goals and financial situation.

Contribute to an IRA.

Individual retirement accounts (IRAs) offer another tax-smart way to save for retirement. There are two basic options:

• Traditional IRAs, through which you can get a tax deduction up front if you meet certain income eligibility requirements. Any earnings grow tax deferred, but you pay income taxes on withdrawals. In 2015, full deductibility begins to phase out at annual adjusted gross incomes (AGIs) of $61,000 for singles and $98,000 for married couples filing jointly. The maximum contribution is $5,500 per person ($6,500 if you are age 50 or older) or 100% of employment compensation, whichever is less.
• Roth IRAs, through which you can contribute after-tax dollars if you meet certain income eligibility requirements. Any earnings grow tax free, and qualified withdrawals are tax free. In 2015, the maximum contribution for Roths is the same as for traditional IRAs. But there are income requirements: Eligibility begins to phase out at annual AGIs of $116,000 for singles and $183,000 for married couples filing jointly.

In general, if you think your income tax rate will be higher in retirement, you may want to consider opting for a Roth IRA. To learn more about Roth IRAs, read Viewpoints: “Nine compelling reasons to consider a Roth IRA.” To determine whether a Roth is right for you, use our calculator.

Consider a health savings account.         

If your employer offers a high-deductible health care plan (HDHP) with a health savings account (HSA), you may want to consider electing the HDHP and opening an HSA. Our research shows that it can be a tax-efficient way to save and pay for current and future qualified medical expenses, including those in retirement. Although your out-of-pocket health care costs may be higher depending on your health care needs, your premiums may be lower. Also, many companies contribute to an employee’s HSA, and employee contributions are made pretax, which means your net after-tax costs can be lower. Contributions can also be made on an after tax basis. And what you don’t spend in your HSA in one year can be carried over from year to year to cover future qualified medical expenses, including those in retirement.

HSAs have a unique triple tax advantage³ that can make them a powerful savings vehicle for qualified medical expenses in current and future years: Contributions, earnings, and withdrawals are tax free for federal tax purposes To make the most of your HSA (if you have access to one and you can afford it), consider paying for current-year qualified medical expenses out of pocket and letting your HSA contributions remain invested in your HSA to pay for future qualified medical expenses, including those in retirement.

The maximum annual contribution that can be made for 2015 is $3,350 for individuals enrolled in self-only coverage and $6,650 for individuals enrolled in family coverage. In addition, individuals who are at least 55 years old, are not enrolled in Medicare, and who otherwise are eligible individuals can make an additional catch-up contribution. The maximum catch-up contribution amount is $1,000. To learn more, read Viewpoints: “Three healthy habits for health savings accounts.”

Consider deferring compensation.

If your company offers a nonqualified deferred compensation plan—and you have maxed out on other workplace savings options and still have the means—consider allocating some of your paycheck there as well. You can decide how much to defer each year from your salary, bonuses, or other forms of compensation. Deferring this income provides two tax advantages: You don't pay income tax on that portion of your compensation in the year you defer it (you pay only Social Security and Medicare taxes), and you can invest the money, so it has the potential to grow tax deferred until you receive it. But a deferred compensation plan is not for everyone—and the rules are complex—so you'll want to weigh the pros and cons carefully before signing up. To learn more, read Viewpoints: “Nonqualified deferred compensation plans.”