The average life span for Americans is around 73 years for men and 79 for women, and financial advisors often model life expectancy for their clients much longer than that. Regardless, that’s at least 15 years of expenses to consider. Tapping into accounts at 59 and a half, even if a penalty isn’t levied, can significantly reduce total savings and decimate compounding returns.

Just because you can tap into your retirement accounts without penalty doesn’t mean you should, financial advisors say.

“Almost all of my clients are Gen X and absolutely none of them are in a position to retire or take funds from retirement accounts,” says Liz Windisch, a Denver-based certified financial planner (CFP). “My advice to them is to not take any distributions at this time and to wait as long as possible.”

And sometimes, investors still can’t take distributions even if they reach 59 and a half based on other rules. For example, tax-free Roth distributions must meet the five-year rule (meaning the account has been open for at least five years), and not all employers allow 401(k) distributions while you are still working.

When to take distributions from retirement accounts is a complicated question that varies for every individual and family. There are a number of factors to consider, including thinking through when you will take Social Security, how you are going to pay for Medicare, and your cash flow needs now and in the future, among others, says Stephen Maggard, a South Carolina–based CFP.

“Before thinking about making distributions from retirement accounts, it’s important to build out a cash flow plan for the next 15 years,” says Maggard. “Age 60 to 75 is truly a golden opportunity for tax planning. You have many decisions to make that will affect your cash flow and you can not take these decisions back.”

Many advisors recommend drawing from taxable accounts first; followed by tax-free, or Roth, accounts next; and tax-deferred last (that said, tax-deferred and tax-free can be swapped, depending on your personal situation).

Gen X falls short on retirement savings

It’s especially important to be prudent for a generation that isn’t necessarily ready for retirement. Research—as well as surveys of Gen X savers—has found that this cohort is falling far short of recommended savings amounts. 

There are a number of reasons for that, including that this is the first modern generation that largely had to save on its own for retirement and cannot rely on private pension plans. Additionally, when Gen X did get access to accounts like a 401(k), they were relatively new and did not have all of the features—like auto-enrollment and auto-escalation—that have helped younger generations to save more. They also had higher student loan debt than the generations before them, on average, and are now grappling with a cost-of-living crisis as they potentially act as caregivers for both children and parents.

Rather than start tapping into retirement accounts now, advisors say to do so only in times of emergency.

One way Gen X can better prepare for retirement is to take advantage of catch-up contributions. Those aged 50 or older can save more in their tax-advantaged savings accounts than younger investors, to the tune of thousands of dollars each year in the case of a 401(k): While the 401(k) contribution limit is $23,000 this year for most people, those 50-plus can stash away an additional $7,500.

Another tip: Focus on tax reduction, says Andrew Herzog, a Texas-based CFP. Most Americans have all or the majority of their retirement savings in pretax accounts like 401(k)s and traditional IRAs. But this can have major tax implications in retirement, when the bill will finally come due.

“How and when you begin withdrawing from retirement accounts has a huge impact on your tax bill,” Herzog says.

He suggests looking into Roth conversions, which essentially means moving funds from a pretax vehicle to a post-tax vehicle. You’ll pay taxes on the money you convert at your tax rate at the time of conversion, and then it will grow tax-free thereafter. He suggests beginning the conversion the year following your official retirement, when earned income, and therefore your tax rate, will likely be lower.

“This window of opportunity between retirement and the onset of [required minimum distributions] is where Roth conversions can be most effective for saving on taxes,” he says. “It’s important to consult with a tax professional on this, especially when Social Security payments begin, because that will be a new source of income to contend with as well.”