Guide
Tax-advantaged retirement accounts.
Where money is saved can matter almost as much as how much is saved. Account type affects taxes, access, and retirement withdrawal planning.
Traditional workplace plans and traditional IRAs may reduce taxable income when contributions are made, but withdrawals are generally taxable later. Roth accounts are funded differently and may provide tax-free qualified withdrawals if rules are met.
Taxable brokerage accounts do not have the same contribution limits, but realized gains, dividends, and interest can affect taxes along the way. They may also provide flexibility for people retiring before standard retirement account access ages.
For 2026, the IRS announced a 401(k) employee contribution limit of $24,500 and an IRA contribution limit of $7,500, with separate catch-up rules. These limits can change, so verify current IRS guidance before using a number in a plan.
Savings order
A common planning question is whether to prioritize employer match, high-interest debt, emergency savings, Roth accounts, traditional accounts, or taxable investing. The answer depends on taxes and liquidity.
Withdrawal order
Retirement withdrawals can affect taxes, subsidies, Medicare premiums, and future required distributions. This is a planning area where professional advice can be valuable.
Official resource
Use the calculator for high-level savings math, then compare your account limits against current IRS retirement plan contribution limits.
Model contribution changes