The Right Order to Fund Your Accounts: 401(k), IRA, HSA, Brokerage

You start a new job. Open enrollment lands in your inbox with a 401(k) match, an HSA option, and a list of contribution percentages to fill in before the deadline. Nobody hands you a sequence to follow, just a set of forms, all due at once, for accounts you're supposed to fund in some order you're expected to already know.

There is a widely used order, and it holds up for most people most of the time. It's a default, though, not a law of physics, and several genuinely common situations reorder it.

The default order, and why it exists

1. Employer 401(k) match, up to the full match
2. HSA, if you have an HSA-eligible health plan
3. Roth or traditional IRA
4. Back to the 401(k), up to the annual max
5. Taxable brokerage account

The logic underneath: capture guaranteed free money first, then take the most tax-advantaged accounts before the merely tax-advantaged ones, then use the accounts with the most investment flexibility before the ones your employer chose for you, and only then move to an account with no tax advantage at all.

Step 1: the employer match is not optional to skip

If your employer matches contributions, get the full match before doing anything else with new savings. A typical match structure looks something like 50% of your contributions up to 6% of pay. The specifics vary by employer, but the shape is common. That match is an immediate, guaranteed return on your money that no other account can offer, deposited the moment you contribute enough to earn it.

Skipping it to fund something "better" almost never pencils out, because you're not comparing investment returns. You're giving up money that was already yours to claim.

One wrinkle worth checking before you assume the match is fully "yours": some employer matching contributions vest on a schedule, meaning you only keep the employer's portion if you stay employed for a set number of years, rather than immediately. Your own contributions are always yours regardless of vesting. Check your plan's summary description for the vesting schedule. It doesn't change the advice to capture the match, since unvested money is still worth pursuing in almost every case, but it does mean the match isn't quite as instantly "guaranteed" as your own contributions if you're likely to leave the job soon.

Step 2: the HSA, if you're actually eligible

A Health Savings Account requires enrollment in a qualifying high-deductible health plan. If you have one, the HSA offers a genuine triple tax advantage: contributions reduce taxable income, growth is tax-free, and withdrawals for qualified medical expenses are tax-free too, per IRS Publication 969. No other account on this list gets all three. For 2026, contribution limits and eligibility rules are set annually by the IRS. See our full piece on HSA investing for the mechanics and a strategy for treating it as a stealth retirement account rather than just a medical expense fund.

If you're not on an HDHP, skip this step; it isn't available to you, and there's no substitute account that replicates it.

Step 3: Roth or traditional IRA

An IRA typically offers more investment choice and lower costs than a workplace plan, since you're not limited to whatever fund lineup your employer's 401(k) provider selected. For 2026, the combined IRA contribution limit is $7,500, or $8,600 if you're 50 or older, per the IRS. Whether to use Roth or traditional depends on your current versus expected future tax rate. See our full breakdown of that decision.

Direct Roth contributions phase out above certain income levels, detailed on the IRS's Roth IRA page; high earners affected by this generally still have traditional IRA access, or use a backdoor Roth conversion.

Step 4: back to the 401(k), up to the max

Once the match, HSA, and IRA are funded, direct additional savings back to the 401(k) up to its annual limit: $24,500 for 2026, with an $8,000 catch-up if you're 50 or older and a higher $11,250 catch-up for ages 60 through 63, per the IRS. The 401(k) comes after the IRA in this order specifically because of the fund-selection and cost tradeoff, not because it's a worse account in every respect. Its contribution ceiling is much higher than an IRA's, which matters a great deal once you're trying to save aggressively.

Step 5: taxable brokerage

Once tax-advantaged space is exhausted, or if a specific goal needs money before typical retirement age without early-withdrawal penalties, a regular taxable brokerage account is the remaining option. It offers no special tax treatment on contributions, but no restrictions on when you can access it either: a genuine advantage for money earmarked for a goal in your 40s or 50s, well before most retirement-account access ages.

Step 5 being last in the default order doesn't mean a taxable brokerage account is never funded until every other account is maxed out. If you're saving for a goal with a defined, near-term timeline (a house down payment in three to five years, for instance), that money often doesn't belong in a retirement account at all, tax advantage aside, because retirement accounts penalize early access. Someone pursuing an early exit from full-time work well before typical retirement account access ages also frequently builds a taxable brokerage balance deliberately, alongside tax-advantaged accounts rather than strictly after them, specifically to have a bridge of accessible money for the years before retirement accounts open up. In both cases, "last" describes priority for pure retirement savings, not a rule that a brokerage account must sit empty until everything else is full. If early retirement is the actual goal, figuring out the savings rate that gets you there matters more than strict adherence to this order.

A worked example: what skipping the match actually costs

Say your salary is $70,000, and your employer matches 50% of your contributions up to 6% of pay. Contributing 6% means you put in $4,200; the employer adds $2,100. If you contribute only 3% one year to free up cash flow, you leave $1,050 of match unclaimed for that year alone.

Invested and left to grow at an illustrative 7% a year for 30 years, that single missed year's worth of match ($1,050) grows to roughly $8,000 by the time you'd otherwise retire. Missing the full match every year for even a handful of years compounds that cost many times over. It's the single most expensive line item in this whole priority order to get wrong, precisely because it's the easiest one to fix.

Real edge cases that reorder the list

• No employer match at all. Some plans offer no match, in which case the 401(k)'s main edge over an IRA, free money, doesn't apply, and it's often reasonable to fund the HSA and IRA before routing meaningful money into an unmatched 401(k), reserving that account mainly for its higher contribution ceiling once the IRA is maxed.
• No HSA-eligible plan. If your only health coverage option isn't a qualifying high-deductible plan, skip the HSA step entirely. There's no substitute account with the same triple tax treatment, so the order simply moves from the match to the IRA.
• High income phases out Roth IRA eligibility. This doesn't remove the IRA step; it changes which flavor you use, or introduces a backdoor Roth conversion as an extra maneuver. It doesn't change the underlying order of match, HSA, IRA, 401(k) max, brokerage.
• A genuinely bad 401(k) fund lineup. If your only options are high-cost actively managed funds with no reasonable index alternative, some people cap 401(k) contributions at the match and lean harder on the IRA and brokerage steps, accepting the lower contribution ceiling in exchange for better, cheaper investment choices.

None of these edge cases invalidate the general order for most people in most jobs. They're real enough, though, that "just follow the list" without checking whether steps 1 and 2 actually apply to you is itself a common mistake.

Putting it into practice

Most people don't fund these five buckets in a single deliberate decision once a year. In practice, it works best as a standing setup: a payroll deduction into the 401(k) sized to capture the match, an automatic monthly transfer into an HSA and IRA sized to hit their annual limits by year-end, and a 401(k) contribution percentage increase to soak up any remaining savings capacity after that. Automating the order once, rather than re-deciding it every paycheck, is what actually makes a priority list like this stick. See automating your finances for the mechanics of setting that up.