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By Jo Ling Kent

As baby boomers hit the critical age of 70 ½, they will start taking from their 401(k) retirement money for the first time.

They are the first generation to plan their retirements around 401(k)s, and will be the largest generation to ever withdraw those funds.

Rich and Gayle Sweda, a baby boomer couple, have been diligently putting money in their 401(k) for nearly 25 years. The couple has looked forward to a big reward after years of saving.

“We work hard, we’ve raised our family and retirement is now our time,” Rich said. “It’s for us.”

Having saved for so long, the Swedas believe they are in a good position, but it’s still important for baby boomers to withdraw their money in smart way. This includes finding out how much money is required to be taken out on the first withdrawal, calculating the tax rate, and then considering whether to reinvest some of that money to grow the cash.

Half of Americans Are 'At Risk'

According to the National Retirement Risk Index, more than half of American households are “at risk” of running low on money during retirement. Some people may also need to use their 401(k) money before they actually retire.

Related: The 401(k) Mistakes That Could Cost You a Bundle

Anyone facing these issues should take a look at a little-known IRS exception, known as Section 72-T. It allows limited penalty-free withdrawals from a 401(k) at any age for at least five consecutive years. Withdrawals are still taxed, but there is not a 10 percent penalty.

As for younger folks who are saving but not ready to withdraw, the Swedas have some advice on saving early for life’s biggest rewards.

“The best thing to do is to have it drawn out of your salary right away,” Rich told NBC News. “Don’t let it go through your hands. Because if you don’t see it, you don’t have to spend.”

What Can You Do Now?

"Make savings into a 'bill' in your budget," recommended Kenneth A. Willetts, Senior Vice President of Foundational Counseling at Ayco, a Goldman Sachs company.

"Earmark a fixed dollar amount and pay your savings account when you pay your other bills," Willetts said. "You’ll see your savings steadily grow and if extra money comes your way, you can boost your savings even more."

Another way to maximize your benefits is to find out if your employer offers financial literacy services. "Programs like this may help you understand your total financial picture, including how to best plan for your vision of retirement," Willetts told NBC News.