You’re Getting the 401(k) Match. Here’s Where the Next Dollar Should Go

Everybody knows the first rule: take the full employer match. It’s a guaranteed 50% to 100% return the day you contribute, and nothing else in investing comes close.

The second question gets less airtime. Say you’re already contributing 5% to get the match. You get a raise, or a bonus, or you finally paid off a card. Where does the next $500 a month go?

Here’s the order I’d follow for most people, with the 2026 numbers that go with each step.

Quick example. You earn $90,000 and your employer matches 100% of the first 4% you contribute. Putting in $3,600 gets you another $3,600 for free. Skip it and you’re walking away from $3,600 a year. Do this first, no debate.

A health savings account is the only account with a triple tax break. Contributions go in pretax, growth is tax-free, and withdrawals are tax-free when used for qualified medical costs. You need a high-deductible health plan to use one.

The 2026 limits are $4,400 for self-only coverage and $8,750 for family coverage, with an extra $1,000 if you’re 55 or older.

Here’s what that means in dollars. A family that puts in $8,750 and is in the 22% federal bracket saves about $1,925 in federal income tax that year. And if you can pay current medical bills from your regular cash and leave the HSA invested, it can grow. At a 7% average annual return (an assumption, not a promise), contributing $8,750 a year for 25 years leaves you with roughly $553,000. Medical costs in retirement are big, so that money won’t sit idle.

The 2026 IRA limit is $7,500, or $8,600 if you’re 50 or older. In a Roth, you pay tax now and never again. Good news if you think your tax rate will be the same or higher later, or if you just like having a pile of money that’s tax-free.

Your modified adjusted gross income (MAGI) decides how much you can put in:

The payoff is large. Put in $7,500 a year for 30 years at 7% and you’d end up with about $708,000, with none of it taxed when you take it out. You only contributed $225,000 of that. The rest is tax-free growth.

Lower income? Check the saver’s credit too. In 2026 it’s available if your adjusted gross income is no more than $40,250 (single), $60,375 (head of household), or $80,500 (married filing jointly). It can cut your tax bill directly, on top of whatever else you get.

The 2026 employee limit is $24,500. If you’re 50 or older, add $8,000 for a total of $32,500. And if you’re 60 to 63, the catch-up is $11,250, which brings the total to $35,750.

Why this comes after the HSA and Roth? Mainly because those accounts usually beat a plain 401(k) on tax treatment, and 401(k) investment menus can be clunky and costly. But a maxed 401(k) is still powerful. For someone in the 22% bracket, a full $24,500 traditional contribution cuts the federal tax bill by $5,390 this year.

Don’t forget the Roth 401(k) option, if your plan has it. Picking between pretax and Roth comes down to a guess about your tax rate in retirement. If you’re early in your career and in a low bracket, lean Roth. If you’re a high earner, lean pretax. Splitting the difference is perfectly fine too.

Some 401(k) plans let you make after-tax contributions beyond the $24,500 limit. The combined limit from you and your employer for 2026 is $72,000 ($80,000 if you’re 50 or older, and $83,250 if you’re 60 to 63). If your plan allows in-plan Roth conversions or in-service withdrawals, you can move those after-tax dollars into a Roth. Ask your plan administrator. Plenty of plans don’t offer it.

If you earn too much for a direct Roth IRA contribution, you can put money in a traditional IRA and convert it. Watch out for one thing: if you have other pretax IRA money, the pro-rata rule makes part of the conversion taxable. Talk to a tax pro before you try it.

No contribution limits, no age restrictions, and you can pull the money out any time. You pay capital gains tax on profits. Here’s a nice perk: long-term gains can be taxed at 0% for married couples with taxable income up to $98,900 in 2026. Index funds in a brokerage account are a fine place for goals that come before retirement age.

Say you’re 38, married, earning $140,000 together, on a family high-deductible plan. You have $1,500 a month to invest after getting the match.

That’s one plan, not the only plan. If you have no HSA, skip step two and all $1,500 starts with the Roth and the 401(k).

If you don’t have three to six months of expenses in savings, build that alongside your match. Retirement accounts charge penalties for early withdrawals, and an emergency shouldn’t force you to raid them. High-interest debt is another reason to pause. A 24% credit card balance is a guaranteed 24% loss that outweighs most investing gains.

The SuperMoney app can help you see how much is really free each month after bills, so you know what number to automate. It also lets you set goals for each account, so you can watch your HSA, Roth, and 401(k) fill up.