US Retirement Accounts: 401k, IRA, HSA, and More Explained
2024-05-12
Educational content only. Rules and tax laws change over time; verify official sources.
Americans have more retirement account options than any other country. Here's how to use them all strategically.
The American Retirement Account Zoo
401(k) / 403(b)
- 2024 limit: $23,000 ($30,500 if 50+)
- Tax treatment: Pre-tax contributions, taxed on withdrawal
- Best for: High earners, employer match
Roth 401(k)
- 2024 limit: Same $23,000 (combined with traditional)
- Tax treatment: After-tax contributions, tax-free withdrawals
- Best for: Expecting higher taxes in retirement
Traditional IRA
- 2024 limit: $7,000 ($8,000 if 50+)
- Tax treatment: Deductible if income below limits
- Best for: No workplace plan, moderate income
Roth IRA
- 2024 limit: $7,000 ($8,000 if 50+)
- Income limits: Phase out at $146k single, $230k married
- Best for: Tax-free growth, flexibility (contributions withdrawable anytime)
HSA (Health Savings Account)
- 2024 limit: $4,150 individual, $8,300 family
- Tax treatment: Triple tax-advantaged (deduction, growth, and withdrawals for medical)
- Best for: Anyone with high-deductible health plan
The Optimal Order
- 401(k) up to match: 50-100% instant return
- Max HSA: Triple tax advantage beats everything
- Max Roth IRA: Tax-free growth forever
- Max 401(k): Reduce taxable income
- Backdoor Roth: If over income limits
- Taxable brokerage: After all tax-advantaged space used
The Backdoor Roth
Over the Roth IRA income limit? There's a legal workaround:
- Contribute to Traditional IRA (non-deductible)
- Convert immediately to Roth IRA
- Pay taxes only on any gains (usually minimal)
Note: Works best with no existing Traditional IRA balance.
Mega Backdoor Roth
Some 401(k) plans allow after-tax contributions beyond the $23k limit, up to $69,000 total. These can be converted to Roth, turbocharging your tax-free savings.
Plan Your Account Strategy
Use our calculator to optimize your retirement account contributions.
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