It’s tax season, and people who are busy making last-minute contributions to retirement funds to take advantage of tax benefits this year might be forgetting to consider where they’re putting money.

Different types of retirement accounts offer different tax advantages in retirement. How and when you withdraw money from various accounts can determine how much you pay in taxes, so diversifying the types of accounts is just as important as diversifying the types of investments you make.

“Every dollar you lose to taxes is one less dollar in your pocket,” said Maria Bruno, Vanguard’s head of U.S. wealth planning research. “Holding different account types helps manage uncertainty around future tax rates because we don’t know in 20 to 30 years, what the tax regime will be or what your personal tax rate might look like.”

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