Approximately 51% of Americans retire at the age of 61 or earlier. Another 23% retire between the ages of 62 and 64. Thus, it's evident that the thought of retirement is likely to hit when you hit the age of 60.

On average, Americans save around $141,000 for retirement. This number can vary greatly. What's more interesting is that retirement savings are never usually concentrated in one area. They tend to be distributed across a range of channels like bank deposits or healthcare.

Retirement might be a long way off, but you should start planning now. That's because the sooner you start saving for retirement, the more benefit you can accrue from compound interest over time.

Thus, if you're working toward retirement, it's important to know what strategies will maximize your savings while minimizing taxes and other costs.

Here are seven tips for maximizing your retirement savings.

#1 Understand Why You're Saving

Before you can make the most of your retirement savings, it's important to understand why you're saving in the first place and what your goals are. This will help guide how much money you put aside for retirement, as well as how often or when to invest.

You should also think about whether or not your savings will have a guaranteed payout when you retire (like from an employer) or if they are more reliant on market performance. If your retirement funds rely heavily on market performance, it could be worth trying to get into funds that have lower fees and/or better risk-adjusted returns.

#2 Use a Budget to Guide Your Savings

The first step to saving for retirement is to understand what you want to achieve. If you don't know how much money you need to live on, it can be difficult to determine how much savings you need or have left over at the end of each month.

To begin setting a budget, list your income and expenses as they occur each pay period. If a certain bill comes every month, like cable or cell phone service, include those in your monthly budget as well. Make sure that any one-time expenses (like paying off credit card debt) are accounted for separately from recurring bills. That way, they can't throw off your calculations about how much money is left over at the end of each period.

Once this information is written down in front of you, calculate how much money there actually is left over after taxes are taken out, and monthly bills have been paid. That amount should be added to whatever amount was already set aside from earlier paychecks so that it can accumulate over time into one large sum of savings by retirement age.

#3 Maximize Your Employer-Sponsored Retirement Plan Contributions

A 401(k) is a retirement plan offered by employers. When you contribute to your 401(k), you're setting aside money that will grow tax-free until you withdraw it at retirement. The contributions and earnings in the account are not taxed until withdrawn when they are taxed as regular income.

Depending on your salary and age, this may not be enough for retirement, but maximizing this benefit can help build savings towards other goals. These include paying off debt or saving more for children's college costs.

#4 Save in Other Vehicles in Addition to Your 401(k)

There are many ways to save money throughout your life, but you must start saving as soon as possible. One way to do this is by contributing to a 401(k) plan, which can reduce your taxable income now and allow for tax-free growth in the future. However, if you have any extra cash lying around, consider investing it in another vehicle, like an IRA or 529 plan.

While there are many benefits of opening a Roth IRA, they require paying taxes upfront on contributions made each year. They also don't offer any kind of employer match, though some companies will let employees contribute on their behalf. However, if you don't need the money right away and want to get ahead on retirement savings without paying taxes again later, a traditional IRA may be worth considering instead.

#5 Consider a Non-Qualified Annuity

A non-qualified annuity is a type of contract between you and an insurance company or bank. You deposit money into the contract, and the contract pays you interest. The interest rate is usually set at a fixed amount or variable rate tied to some index-like the stock market or bond market.

The benefits of such a product include:

• Tax-deferred growth on earnings in the account (the excess above what is needed for immediate withdrawals).
• Access to money in case of emergencies, which may be especially helpful if your other assets are tied up elsewhere.
• The flexibility allows you to make changes to your investment portfolio more quickly than with other investments (mutual funds). This can help mitigate risk when markets change quickly due to unexpected events like natural disasters or economic downturns.

#6 Take Advantage of Catch-Up Provisions

Catch-up provisions are available for anyone 50 or older. These allow you to save more in your 401(k). You can increase your contribution rate by an additional $6,000 per year, for example, which will make a big difference if you're saving for retirement.

#7 Plan for Health Care Costs

Consider health savings accounts (HSAs) as an option. While HSAs have been around since 2004, they only became widely available after 2007 with the Pension Protection Act of 2006 and the Affordable Care Act (ACA). HSAs allow you to make pre-tax contributions on pre-tax dollars into your account each year that are used to pay for qualified medical expenses no matter where those services are provided.

You can also consider long-term care insurance if your spouse or family will rely on someone else's support during their golden years. Long-term care insurance helps pay for assisted living facilities and nursing homes when a person can no longer perform daily living activities independently due to illness or injury. This includes conditions such as Alzheimer's disease or stroke recovery time which may result in memory loss or physical impairment requiring assistance from others until death.

Around 25% of Americans have no retirement savings at all. However, that shouldn't be the case with you. Whether you're in your 20s or 40s, don't wait to start saving for retirement. Start small and keep adding to your savings every year. Even if you're not sure how much to save each month, remember that every penny counts.