Chapter 04 · Keep more of it

Keep more of what you earn.

Before choosing investments, choose the account. Tax-advantaged accounts can add hundreds of thousands of dollars over a career — simply by not handing part of every year's growth to the IRS.

Source: IRS — COLA increases for dollar limitations · last checked 2026-11-06. 2027 limits are expected from the IRS this fall; we update this page as soon as they are official.

The three accounts, in plain English

401(k): the workplace account

Contributions come straight out of your paycheck. Many employers add a match — for example 50% of what you put in, up to 6% of salary. A match is an immediate, guaranteed return, which is why it's usually the first thing people capture.

IRA: the account you open yourself

Any broker from chapter 03 can open one. A Roth IRA is funded with after-tax money and grows tax-free; a Traditional IRA may give a deduction now and is taxed on withdrawal. Roth eligibility phases out between $153,000 and $168,000 of income for single filers ($242,000–$252,000 married filing jointly).

HSA: the quiet triple tax break

If you have a high-deductible health plan, an HSA is deductible going in, grows tax-free and is tax-free when used for medical costs. Many FIRE savers invest it rather than spend it.

A commonly used order

1. Contribute to the 401(k) up to the full employer match.
2. Fund an HSA if you're eligible.
3. Fund a Roth (or Traditional) IRA.
4. Go back and raise 401(k) contributions toward the limit.
5. Invest anything beyond that in a regular taxable brokerage account.

This is a widely cited educational sequence, not a recommendation for your situation. Fees inside your 401(k), your tax bracket and your plans can change the best order.