The United States has a progressive tax system, which means that the more money you earn, the more you’re going to pay in taxes. This is not only true for income taxes but also estate taxes and capital gains. That said, there are ways to reduce your taxable income and make sure that you have enough saved up for retirement—and even if it’s later than what other people are doing. The government has implemented various programs that allow individuals to put money away for retirement without paying tax on it at the time of deposit or withdrawal. If your employer offers matching contributions on your 401(k), then make sure you take advantage of this benefit because it will dramatically increase how much money goes into your account over time.

1. Consider opening a traditional IRA

If you’re already saving for retirement in a 401(k) or another tax-advantaged account, opening a traditional IRA can be a great way to save more. If you have earned income and are not eligible for an employer-sponsored retirement savings plan, like a 401(k), then starting an IRA is as simple as filling out some paperwork at your local bank or credit union. You can open one at any age and contribute up to $6,000 per year ($7,000 if you’re 50 or older). Those who contribute the full amount each year qualify for a tax deduction on their taxable income.

2. Take advantage of your 401(k)

By contributing pre-tax money to your 401(k) plan, you can reduce your taxable income and pay fewer taxes. You can also deduct contributions from your taxable income. When you withdraw the money in retirement, it’s taxed as ordinary income just like other sources of cash flow.

A 401(k) is an ideal vehicle for high earners with a long time horizon because they allow you to contribute up to $18,500 per year in 2018 ($24,500 if age 50 or older). The maximum allowable amount will increase each year with inflation and wage growth until 2022 when it reaches $56,000 (or $61,000 if age 50 or older).

3. Factor in employer matching contributions to your 401(k)

If you are employed, consider contributing to a 401(k). You can get an instant tax break when you deposit money into your plan and your employer will match some of that contribution. The more aggressively you invest in the plan and take advantage of those matching funds, the more your money will grow over time.

If you decide to retire before age 70 (and have worked for at least five years), there’s no penalty for early withdrawal from 401(k) plans. If it’s not an emergency situation and you have plenty saved up for retirement, this could be an option if you need cash immediately after leaving work.

4. Consider a Roth IRA

You can contribute to a Roth IRA if you earn less than $137,000 for single filers and $203,000 for married couples filing jointly.

You may not be able to deduct your contributions from your taxes in the year you make them, but withdrawals are tax-free in retirement.

The amount you’re allowed to contribute depends on your income: You can contribute up to $6,000 per year if you’re under 50 years old and up to $7,000 if you’re 50 or older.

5. Opt for the HSA

One of the best ways to reduce your taxable income is to contribute to an HSA, or health savings account. HSAs are tax-advantaged savings accounts for medical expenses, and they are one of the most flexible ways to save for any kind of future expense. Money deposited in a HSA can only be used for qualified medical expenses (such as copays, prescription drugs and dental visits), but once it’s inside the account it grows tax-free until you withdraw it later on.

The benefit here is that money withdrawn from an HSA won’t be taxed—and any interest growth is also tax-free! This means that if you’re a healthy person with good insurance coverage who doesn’t expect much out-of-pocket spending during retirement years, contributing money into an HSA could help save money on taxes now while giving yourself additional resources later on.

6. Investigate tax-deferred annuities

If you’re a high earner, tax-deferred annuities may be an option worth exploring. Annuities are a type of investment that offers tax-deferred growth, meaning that any income earned on your investment is not taxed until the money is withdrawn. This benefit makes them ideal for people who are saving for retirement and want to delay paying taxes on their investments until they retire.

However, annuities aren’t right for everyone. For example, if you take out a loan against an existing annuity contract (called “releasing equity”) or convert your existing annuity contract into another type of investment (called “rolling over an existing contract”), then the IRS considers this as receiving taxable income even though no new money was added to the account; therefore, it can reduce some of the benefits mentioned above.

Bonus tip:

Make sure you’re putting enough money away for retirement because you will probably have to work longer, but you may not need as much if you make smart choices about saving and investing now.

You cannot change the past, but you can make changes to your future. If you are a high-earner and have been saving for retirement, then good for you! However, if you have not been saving and investing as much as possible, then it is time to make some changes.

One thing that most people do not realize when they begin their careers is how much more money they will actually need in order to retire comfortably because of inflation and rising health care costs. In addition to this, many people will also live longer than ever before which means that they will have more years where their expenses are higher than their income.

If you’re a high earner or wealthy individual, there are ways to reduce your taxable income. The most important thing is that you understand how much money you need for retirement and how much of it will be taxed, so that you can make smart decisions about saving now.