GoKawiilA savings priority order for 401(k), IRA, and HSA contributions
Financial planners commonly recommend a sequence for allocating limited retirement savings dollars: capture any employer 401(k) match first, then max out an HSA if eligible, followed by an IRA (Roth or traditional), and finally additional 401(k) contributions up to the annual limit. The framework helps savers with a fixed monthly or yearly budget decide where each dollar produces the most value.
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With inflation squeezing household budgets, many people can't max out every tax-advantaged account, making the order of contributions matter as much as the total amount saved. Missing an employer match or overlooking an HSA's triple tax advantage can mean leaving free money or long-term tax savings on the table.
- Employer 401(k) match should typically be captured first since it's essentially free money.
- HSAs offer unique triple tax benefits, making them a high priority for eligible savers.
- IRAs often precede additional 401(k) contributions due to lower fees and broader investment choices.
The Simple Path to Wealth by JL Collins — If you're figuring out where each dollar should go across a 401(k), IRA, or HSA, this classic gets you fluent in index funds, tax-advantaged accounts, and long-term compounding. It's written in plain, conversational language, so the hierarchy in the article turns into an actual plan you can follow.
See The Simple Path to Wealth by JL Collins on Amazon → Affiliate link — we may earn a commission on purchases, at no extra cost to you. Product picked by AI based on this article; it is not a tested recommendation.Source: fastcompany.com, 2026-09-01
Published there as: “401(k), IRA, or HSA? Here’s a hierarchy for retirement savings”
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