For the last 30 or 40 years, clients who are near retirement have been working and saving every dollar possible, and while they’re almost at the finish line, there are still savings to be had.

Clients who are nearing retirement provide a unique tax planning opportunity, as they are likely to have both more income and more income taxes now than they will when they leave full-time employment in the near future.

Here are some important steps advisors should take to reduce their clients’ taxes while they’re working but on the cusp of retirement:

Max Out the 401(k)
Workers on their way out should do whatever they can to increase contributions to a pre-tax retirement plan, like a 401(k) or 403(b). In 2013 the limits are generally the lesser of the employee’s income, or $17,500. That figure rises to $23,000 for contributors over age 50.

Depending on the employee’s tax bracket, every dollar deposited into a 401(k) could save the client about 10 to 40 cents in income taxes for the year in which the contributions are made.

Say the client contributes $10,000 while working, and it would otherwise be taxed at a rate of 35 percent. Then he retires a few years later, and the funds are taxed at 15 percent when pulled out of the retirement account. That gap of 20 percent between tax rates produces a theoretical savings of $2,000.

Don’t Forget the HSA     
Employed clients who are eligible and able might want to take out a high-deductible health insurance option, and then make corresponding tax-deductible contributions to a Health Savings Account (HSA). The HSA contribution limits for 2013 are $3,250 for individuals and $6,450 for families, with another $1,000 for those over age 50.

The high-deductible health insurance helps users save money on premiums now and adds some flexibility on how they spend their health care dollars. Any unspent money in the HSA rolls over every year, and can be spent tax-free on future qualifying medical expenses. Once the client reaches age 65, the left-over funds can be withdrawn as taxable income, just as if it were in an IRA.    

Refinance the Mortgage
Those increased contributions to tax-advantaged savings vehicles could mean a cash flow crunch for many workers. But your clients may be able to lower total monthly expenses (and taxes) and raise liquidity by re-financing their mortgage—preferably for as much (and as long) as the lender will allow.

There may be new or higher monthly mortgage payments, and the interest cost can’t be ignored. But this might be the last best time for clients to tap the equity in their homes at historically-low rates, relatively-high valuations, and within relatively friendly lending standards.

Those low mortgage rates can be even more advantageous since the interest may be tax-deductible, as long as the clients itemize. Check out Publication 936 at www.irs.gov for more information.

Any cash-out proceeds from the mortgage should be parked in safer savings vehicles, and used for future big expenses that would otherwise cause the client to borrow (i.e. a new car, home improvement, or college costs).

Take Your Losses
When a working, higher-income client experiences investment losses outside of tax-sheltered accounts, make sure you consider making the best of the unfortunate occurrence by realizing the losses, and the ensuing tax benefits.

In 2013 the client can usually use any losses to offset realized gains, and then up to $3,000 of the losses against ordinary, taxable income. Again, depending on the clients’ tax bracket, that amount could save up to $1,000 or so in taxes. Losses over that $3,000 amount that can’t be used this year can be “carried forward” into future years, and potentially used to reduce future taxable income or gains.

Just make sure you avoid the “wash sale” rules by not buying the security within 30 days before or after you sell it for the tax loss.

Wait to Take Gains
Tax concerns usually aren’t enough justification to hold off selling a stock, bond, or fund. But if you can help it, there are at least two thresholds to meet before liquidating an appreciated security, especially for those high-income clients who will soon retire.

Start by waiting at least a year from the date of purchase, so that the gains will be considered “long-term.” Beginning in 2013 the federal tax rate on those gains will be 15 percent for those in the 25 percent through 35 percent federal income tax brackets.

The long-term capital gains tax rate is now 20 percent for those taxpayers in the new 39.6 percent bracket. In addition, high income earners could incur the new additional 3.8 percent “Medicare Tax” on their gains, as well.

Once the clients retire and are (hopefully) in the lower income tax brackets, the long-term federal capital gains tax hit could be as little as 0 percent.

Tax Benefits Today, Charitable Giving Tomorrow
Another aspect of tax planning that retiring clients should consider is their long-term charitable giving. It’s possible to accelerate the tax benefits of giving to now, and delay the actual transfer of the money to the charity until later.

The strategy starts with the clients projecting how much money they may plan to give to qualified charitable organizations over the next decade or longer. The clients then transfer that amount to a “donor advised fund,” or “DAF.” They can get an immediate tax deduction on the donation now, when it’s most useful, since they’re likely in a higher tax bracket now.

The money is then invested among a limited menu of options, and in the future clients can “advise” the account custodians as to the recipients, timing, and amounts of donations.

Those donations will not produce an additional tax benefit at that time. But your clients won’t need it as much once they’re retired.