Where should your next dollar go?
An emergency fund, the 401(k) match, an HSA, a 529, a Roth IRA, a brokerage account, the rest of the 401(k). A few questions put them in your order and pour this year’s savings down it, so you see what lands where and what it takes off your taxes.
The order, and why
Each step fills before the next one gets a dollar. Steps that don’t fit you are left out.
An emergency fund of three months’ spending comes first, in cash, in the money market fund that pays you most after tax. Nothing else matters if a bad month means selling at the wrong time.
The 401(k), up to the match. An employer adding 50 or 100 cents to each of your dollars beats any tax break, and the money goes in before tax.
An HSA, with a plan that allows one: $4,400 for one or $8,750 for a family in 2026. It is never taxed going in, growing or coming out for medical bills, and through payroll it skips Social Security and Medicare tax too.
A 529, while a child is 10 or younger. 37 states and DC give a deduction or credit for it, and up to $35,000 left over can later move to the child’s own Roth IRA.
A Roth IRA, $7,500 each for you and a spouse, $8,600 from 50. Past $168,000 single or $252,000 for a married couple, it goes in through the backdoor.
A brokerage account, for what you want to reach before 59½. You say how much.
The rest of the 401(k), up to $24,500, more from 50, or a Solo 401(k) if you work for yourself.
After-tax 401(k) money, past the Roth IRA’s line, if your plan converts it to Roth: up to $72,000 in all.
Questions people ask
Why an HSA before a Roth IRA?
Both grow tax free, but an HSA also comes off your taxes going in, and through payroll it skips the 7.65% for Social Security and Medicare. Pay medical bills yourself, keep the receipts, and the money can come out tax free in any later year.
Why a brokerage account before the rest of the 401(k)?
A 401(k) is hard to reach before 59½ without a 10% penalty. Once the match, the HSA and the Roth are in, money you may need for a house or a gap in work goes where you can reach it. What you don’t need then goes to the 401(k). You set the amount, and nothing goes there if you say none.
How does the backdoor Roth work?
Put money in a traditional IRA without deducting it, then convert it to Roth. It is clean only if you have no pre-tax money in any IRA on December 31; otherwise part of the conversion is taxed (the pro-rata rule, Form 8606).
What are the deadlines?
401(k) money comes out of paychecks through December 31. IRA and HSA money for 2026 can go in until April 15, 2027. Most states count 529 money by December 31, a few until their return is due. With an account, each date goes on your calendar with a reminder two weeks and two days before.
Is this advice?
It is the order the tax code favours for your answers, and what the limits allow. It says nothing about which funds to buy, and your own situation may call for something different.
Checked on October 1, 2026 against IR-2025-111, 2026 401(k) and IRA limits, Notice 2025-67, Rev. Proc. 2025-19, Publication 969, Health Savings Accounts, Publication 590-A, Contributions to IRAs, Form 5498 (2026), 26 U.S.C. 415(c), the annual additions limit and each state's revenue department or 529 plan. An estimate for your records, not tax advice.
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