Funding investment accounts in the wrong order costs thousands in unnecessary taxes. A systematic priority waterfall maximizes tax efficiency at every income level.
For tax year 2026, start by capturing your full employer 401k match. Level two funds an HSA up to $4,400 for self-only or $8,750 for family coverage. Level three fills a Traditional or Roth IRA up to $7,500.
Level four maxes remaining workplace 401k space up to the $24,500 elective deferral limit. Level five directs remaining savings into a taxable brokerage account.
Following this waterfall structure ensures every dollar accesses maximum tax efficiency first.
Which account level are you currently funding in your financial plan?
(Not financial advice. For educational purposes only.)
