What Order to Invest in 401k, HSA, and Roth? - A Simplified Guide

When it comes to saving for the future, making decisions about where to invest your money can be overwhelming. Three popular options are 401k, HSA, and Roth accounts. But in what order should you invest in them?

Here's a simplified guide to help you prioritize your investments:

1. 401k: Max out your employer's match if available. It's essentially free money added to your retirement savings.
2. HSA (Health Savings Account): After 401k, consider investing in an HSA for medical expenses. It offers tax advantages and can be used for healthcare costs now and in retirement.
3. Roth IRA: Once you've taken advantage of 401k and HSA contributions, consider funding a Roth IRA for tax-free growth and withdrawals in retirement.

Remember, everyone's financial situation is different, so it's essential to consult with a financial advisor to create a personalized investment strategy that aligns with your goals and needs.

When deciding where to put your hard-earned money, it can feel like a jigsaw puzzle. Three popular choices are the 401k, HSA, and Roth IRA. Understanding the best order to invest in these accounts can significantly impact your financial future.

Here's an easy-to-follow guide to help you prioritize:

1. 401k: Start by maxing out any employer match available. It’s like finding a hidden stash of cash that boosts your retirement savings without extra effort.
2. HSA (Health Savings Account): After securing your employer's match, turn your attention to the HSA. This account not only helps you pay for current medical expenses but also allows for tax-free growth when used for qualified health costs, making it a powerful tool for both now and in retirement.
3. Roth IRA: Once you've fully utilized your 401k contributions and HSA tax benefits, consider funding a Roth IRA. Contributions grow tax-free, and you can enjoy tax-free withdrawals in retirement, making it a fantastic long-term investment.

Every individual's financial situation varies, so be sure to consult with a financial advisor to build a strategy tailored to your specific needs and objectives.