Which accounts should you use for retirement?

With so many choices, it can be hard to know where to put your hard-earned money. 

Here’s a closer look at the five accounts we recommend for your retirement savings.

Employer-sponsored retirement plan—401(k), 403(b), 457(b) or Thrift Savings Plan

  • How does it work?

    Invest pre-tax Tooltip or after-tax Tooltip Roth dollars directly from your paycheck for retirement. Your employer might match contributions, up to a certain amount. If you make after-tax Roth contributions, any matching will go into a separate pre-tax account.

  • How should I use it?

    Contribute at least enough to get the full match, if your employer offers one. Increase your contributions 1%-2% each year until you reach the max.

Eligibility, contribution limit and tax information

Health Savings Account (HSA)

  • How does it work?

    Set aside tax-free (pre-tax) dollars for qualified medical expenses. Tooltip

    Most HSAs also let you invest your savings.

  • How should I use it?

    Use it to save for health care costs, before and during retirement.

Show eligibility, contribution limit and tax information

Traditional IRA

  • How does it work?

    Invest pre-tax or after-tax dollars for retirement.

  • How should I use it?

    Consider it if you’ve maxed out your employer plan or don’t have one.

Show eligibility, contribution limit and tax information

Roth IRA

  • How does it work?

    Invest after-tax dollars for retirement.

  • How should I use it?

    Consider it if you’ve maxed out your employer plan or don’t have one—and expect to be in a higher tax bracket in retirement.

Show eligibility, contribution limit and tax information

Brokerage

  • How does it work?

    Invest in stocks, Tooltip   ETFs, Tooltip   mutual funds, Tooltip bonds Tooltip  and other assets.

  • How should I use it?

    Consider it if you want to save more after maxing out your employer and IRA accounts, or to save for non-retirement goals.

Show eligibility, contribution limits and tax information


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