How to prioritize your retirement accounts

Question: Annie in Ft. Thomas: I have a 401(k), HSA, and an IRA. Should I be prioritizing one over the other? It’s hard to know which ones are more important to save in.

A: Technically, they’re all important to save in (you likely knew we would probably say something like that, didn’t you?) – but we understand your frustration. There are a lot of different types of accounts available for retirement, and only so much money to go around. So, yes, there’s definitely an advantage to thinking through your accounts and saving in a certain order.

Generally speaking, here’s how we like to think about something like this:

• Your first priority should always be to save in your 401(k) – if  you get a match. And make sure you’re saving enough to get the full match.
• Next up, save some in your Health Savings Account (HSA). This offers triple-tax benefits for short-term and, even more importantly, long-term healthcare expenses. Plus, once you turn 65, it essentially turns into a de facto 401(k).
• Then, save in your IRA (you could even consider also opening a Roth IRA to get some tax-free growth).
• Lastly, while you don’t mention any taxable brokerage accounts, these are great options as well if you still have some money to put away.