401(k), Roth, HSA: which to fund, and in what order

What each account actually is

• Workplace plan (401(k)/403(b)) — payroll contributions, often with an employer match. Traditional contributions reduce taxable income now; Roth contributions are taxed now and withdrawn tax-free later.
• IRA / Roth IRA — an account you open yourself, typically with a wider menu of options and its own contribution limits.
• HSA — available with a qualifying high-deductible health plan. Contributions, growth, and qualified medical withdrawals are all tax-advantaged, which makes it uniquely efficient.

A sensible funding order

Roth versus traditional comes down to a single question: do you expect your tax rate to be higher now or later? Early-career and lower-bracket years generally favor Roth; peak-earning years often favor traditional. Splitting between both is a reasonable hedge.

• Contribute enough to your workplace plan to capture the full employer match.
• Clear high-interest debt.
• Fund an HSA if you're eligible — including the deductible-sized cushion it can cover.
• Fund an IRA or Roth IRA to your target.
• Return to the workplace plan and increase contributions from there.

Two mistakes worth avoiding

Leaving a match on the table is the most common and most expensive. The second is opening an account, funding it, and leaving the money uninvested — contributing and allocating are separate steps.

Contribution limits change, and your situation is specific. For decisions with meaningful tax consequences, confirm with a qualified tax professional.

Where this hands off

Choosing what goes inside these accounts — funds, allocation, rebalancing, market behavior — is investing strategy, not foundation work.