💸 Savvy FundsOpen the app

🏖️ Retirement & Free Money · Lesson 9 of 10 · 90 sec

The Right Order to Fill Your Money Buckets

🥞 Most people fund their retirement accounts in the order they heard about them, which is roughly the order the ads ran. There is an actual correct order — and getting it wrong means walking past free money to reach a worse deal.

💡 Key idea

Match first, then Roth IRA, then HSA, then more 401(k), then taxable. In that order.

🧠 Why it matters

The classic order: (1) contribute to your 401(k) up to the full employer match — an instant 100% return you cannot get anywhere else. (2) Max a Roth IRA for tax-free growth. (3) If you have a high-deductible health plan, max an HSA — the only triple-tax-free account there is. (4) Go back and put more into the 401(k). (5) Anything left goes to a regular taxable brokerage.

🌍 In the real world

💸 A guy proudly built a $40,000 taxable brokerage account while only putting 1% into his 401(k) — skipping a 5% employer match the whole time. Over five years he walked past roughly $15,000 of free matching money to chase an account with worse tax treatment. The order is not a technicality; getting it wrong is just declining a raise.

📌 Takeaways

  • Employer match is free money — grab it before anything else
  • Roth IRA and HSA get special tax treatment, so use them early
  • Taxable brokerage is last, after the tax-advantaged buckets are fed

📖 Terms in this lesson

Tax-advantaged account: An account like a 401(k), IRA or HSA where money grows with less tax or none.

✅ Test yourself

Of your investing buckets, what should you fund FIRST?
  1. A taxable brokerage
  2. Your 401(k) up to the employer match
  3. Crypto
  4. Individual stocks on a hot tip

Answer: B · Your 401(k) up to the employer match

The match is an instant 100% return. Nothing else comes close — start there.

Why is the HSA special in this order?
  1. It has no rules
  2. It is the only triple-tax-free account (in, growth, and out for medical)
  3. It pays the highest interest
  4. It is required by law

Answer: B · It is the only triple-tax-free account (in, growth, and out for medical)

Tax-deductible going in, tax-free growth, tax-free out for medical — a rare triple.

Start this lesson free →

Quiz, XP and streaks in the app. No sign-up needed.

More in Retirement & Free Money