Retirement plans can be structured in various ways, including employer-sponsored plans like 401(k)s, traditional pensions, or individual arrangements such as IRAs (Individual Retirement Accounts). Contributions to these plans are typically made during an individual's working life, allowing savings to grow tax-deferred until withdrawal, usually during retirement. The specific features, advantage, and tax treatment depend on the plan type. As individuals near retirement, these plans play a crucial role in financial planning, allowing for a smooth transition from active income to retirement income.