Should I invest in my 401(k) or an IRA first?

Your 401(k) up to the full employer match first, because the match is free money. After that, an HSA if you have one, then an IRA, then more in your 401(k).

What is the IRA limit for 2026?

$7,500, plus $1,100 from age 50. The limit covers traditional and Roth IRAs together.

Is a brokerage account a bad idea?

No, but it has no tax break, so use it after your retirement accounts, or for goals before retirement. You can take the money out at any time.

What if my employer doesn’t offer a match?

Then an HSA (if you have a high-deductible plan) and an IRA usually come first, because they offer the same tax breaks and often cheaper funds.

Where to invest: 401(k), IRA, HSA or brokerage account?

Which account first? Fill them in this order, moving on when each is done.

1 401(k) up to the match Your employer’s match is an instant return.
2 HSA If you have a high-deductible health plan: tax-free in and out.
3 IRA Roth or traditional, up to $7,500 in 2026.
4 More in your 401(k) Up to $24,500 in 2026.
5 Taxable brokerage account No limits, and you can take money out any time.

The accounts

Account	Tax break	2026 limit	Getting the money out
401(k), 403(b)	Traditional: tax cut now. Roth: tax-free later	$24,500, plus $8,000 from 50 ($11,250 at 60 to 63)	From 59½, or penalties apply
IRA	Same choice of traditional or Roth	$7,500, plus $1,100 from 50	From 59½; Roth contributions any time
HSA	Tax cut in, tax-free growth, tax-free out for health costs	$4,400 for yourself, $8,750 for a family	Any time for health costs
Taxable brokerage	None	No limit	Any time

A Roth IRA has income limits: in 2026, what you can put in shrinks from $153,000 of income ($242,000 for couples) and stops at $168,000 ($252,000).

Which order

401(k) up to the employer match. If your employer adds 50 cents for every dollar up to 6% of pay, put in at least 6%.
HSA, if you have a high-deductible health plan. See HSAs explained.
IRA: Roth or traditional. See Roth vs traditional.
More in your 401(k), up to the limit.
A taxable brokerage account for anything more, or for goals before retirement.

Pay off credit cards and build an emergency fund first: no investment reliably beats a 22% card rate.

Example: you earn $70,000, your employer matches 50% of what you put in up to 6% of pay, and you can save $800 a month.

$350 a month into your 401(k) is 6% of pay, which gets the full match: another $175 a month from your employer.
$367 a month into an HSA, if you have one, uses the full $4,400 for self-only coverage.
The remaining $83 a month can start a Roth IRA.

As your pay rises, move further down the list.

If you earn too much for a Roth IRA

Above the Roth IRA income limits, you can still put money into a traditional IRA, but you may not get a deduction for it if you have a workplace plan. Some people then convert it to a Roth (a “backdoor Roth”). If you have other traditional IRA money, part of the conversion is taxed, so it’s worth getting advice first. A Roth 401(k) has no income limit.

Tax outside retirement accounts

In a taxable account, dividends are taxed each year, and gains when you sell. Gains on investments held over a year are taxed at 0%, 15% or 20%, depending on your income. See capital gains tax explained.

Index funds and ETFs tend to pay out few capital gains each year, which makes them a good fit for a taxable account. Keeping bonds, which pay taxable interest, in your 401(k) or IRA can save tax too.

The 401(k) calculator shows what your contributions could grow to.