Retirement Guide · 2026 Limits

Best Retirement Plans

Every retirement account ranked — with the exact order you should fund them for maximum tax savings.

The Optimal Funding Order

1. 401(k) match2. Roth IRA3. HSA4. 401(k) max5. Taxable brokerage

This order maximizes free money (employer match), tax-free growth (Roth), triple tax advantage (HSA), and tax-deferred growth (401k). Fund them in this order every year.

#1Employer 401(k) Match

Limit: Up to employer matchTax: Pre-tax (Roth 401k option at some employers)

Free money. If your employer matches 50% of contributions up to 6% of salary, that is an instant 50% return on your money. Always capture the full match before funding any other account.

FIRST priority — do not leave free money on the table

#2Roth IRA

Limit: $7,000 ($8,000 if 50+)Tax: After-tax in, tax-free out

Tax-free growth and tax-free withdrawals. No required minimum distributions. Withdraw contributions anytime penalty-free. The most flexible and powerful retirement account for most people under 50.

SECOND priority — max this after getting employer match

#3HSA (Health Savings Account)

Limit: $4,300 individual / $8,550 familyTax: Triple tax advantage: deductible in, grows tax-free, tax-free out for medical

The only account with a triple tax advantage. If you have a high-deductible health plan, max your HSA and invest it. After age 65, you can withdraw for any purpose (taxed like a Traditional IRA). Many people overlook this as a retirement account.

THIRD priority — if you have an HDHP

#4401(k) (Remaining)

Limit: $23,500 total ($31,000 if 50+)Tax: Pre-tax or Roth option

After capturing the match, maxing your Roth IRA, and maxing your HSA, go back and max out the rest of your 401(k). The higher contribution limit ($23,500) means significant tax-deferred growth.

FOURTH priority — fill up the remaining space

#5SEP IRA

Limit: 25% of income, up to $70,000Tax: Tax-deductible in, taxed on withdrawal

The best retirement account for self-employed individuals. Contribute up to $70,000/year — 10x the regular IRA limit. Simple to set up and maintain. No employee matching required.

Self-employed? This should be high priority

#6Solo 401(k)

Limit: Up to $70,000 ($77,500 if 50+)Tax: Pre-tax and/or Roth options

For self-employed individuals with no employees. Higher limits than a SEP IRA for lower income levels, plus a Roth option. More administrative work than a SEP but more flexibility.

Self-employed alternative to SEP

#7Traditional IRA

Limit: $7,000 ($8,000 if 50+)Tax: Tax-deductible in (if eligible), taxed on withdrawal

Best for high earners who want a tax deduction now and expect lower income in retirement. If you have a 401(k), the deduction phases out at higher incomes. Consider a Roth IRA first unless you are in a high tax bracket.

Alternative to Roth for high earners

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Glen's Take

Most people overthink retirement accounts and underfund them. The strategy is simpler than you think.

Step 1: Get the full employer match. Step 2: Max your Roth IRA. Step 3: If you have an HSA, max that too. Step 4: Go back and max the 401(k). Step 5: If there is money left, invest in a taxable brokerage account. Inside all of these accounts, buy low-cost index funds.

If you follow this order and invest 15-20% of your income starting in your 20s, you will retire a multi-millionaire. It is genuinely that straightforward. The hard part is not the strategy — it is the consistency.

Frequently Asked Questions

What is the best retirement plan?

The best retirement plan is the order you fund them: (1) 401(k) up to employer match (free money), (2) Roth IRA to the max ($7,000), (3) HSA if available, (4) remaining 401(k) to the max ($23,500). This order maximizes tax advantages and free money. For self-employed individuals, a SEP IRA or Solo 401(k) replaces the employer 401(k).

How much should I save for retirement?

The standard recommendation is 15-20% of gross income. At a 15% savings rate starting at age 25, you can comfortably retire around age 60-65. A higher savings rate (25-50%) enables early retirement (FIRE). The exact amount depends on your desired retirement lifestyle and how early you start.

Is a Roth IRA better than a 401(k)?

They serve different purposes. A 401(k) is better for the employer match (free money) and the higher contribution limit ($23,500 vs $7,000). A Roth IRA is better for tax-free withdrawals, more investment options, and no required minimum distributions. The ideal strategy uses both.

What if my employer does not offer a 401(k)?

Open a Roth IRA (or Traditional IRA) on your own at Fidelity, Schwab, or Vanguard. If you are self-employed, open a SEP IRA or Solo 401(k). If your employer does not offer a retirement plan, you are eligible for a full Traditional IRA deduction regardless of income.

Can I have multiple retirement accounts?

Yes. You can have a 401(k), Roth IRA, Traditional IRA, HSA, and more simultaneously. The contribution limits are separate for each account type (except Traditional and Roth IRA, which share a combined $7,000 limit). Having multiple accounts maximizes your total tax-advantaged savings capacity.

Recommended Resources

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