Roth IRA, 401(k) or Brokerage Account?

Catch-up and compensation At age 50+, the IRA limit is $8,600 including catch-up; the usual 401(k) catch-up is $8,000. Ages 60–63 may instead qualify for an $11,250 401(k) catch-up. Plan rules and additional Roth catch-up requirements can apply. IRA contributions generally cannot exceed eligible taxable compensation. Source 1, Source 2.

Income affects IRA treatment For 2026, direct Roth IRA contributions phase out at modified AGI of $153,000–$168,000 for single/head-of-household filers and $242,000–$252,000 for married filing jointly. Traditional IRA deductibility also depends on income and workplace-plan coverage; contributing is not the same as receiving a deduction. Source 1.

Contributions versus earnings Regular Roth IRA contributions are distributed first under IRS ordering rules and generally return without income tax or the early-distribution tax. Conversions/rollovers come next, then earnings; conversion five-year rules can differ. Keep records rather than treating the whole balance as contributions. Source 5.

Qualified distributions A qualified Roth IRA distribution requires its five-tax-year period plus age 59½ or an applicable disability, death or qualifying first-home condition. Nonqualified earnings may be taxable and subject to an additional tax. Do not apply Roth IRA ordering rules to a Roth 401(k). Source 5.

Possible extra tax Before age 59½, a taxable retirement distribution may face the additional 10% tax unless an exception applies. On a fully taxable $10,000 distribution, that extra tax alone would be $1,000, separate from income tax. Source 6.

Exceptions are account-specific The age-55 separation-from-service exception can apply to employer plans, not IRAs. Qualified higher-education and limited first-home exceptions apply to IRAs, not 401(k)s. An exception to the additional tax does not necessarily remove ordinary income tax; check the full conditions. Source 6.

A stated assumption If $1,800 is invested at each year-end for 30 years and earns a constant hypothetical 6% annually, it grows to about $142,305. Contributions total $54,000. Calculation: $1,800 × ((1.06³⁰ − 1) ÷ 0.06).

What the illustration leaves out Actual returns vary and can be negative. Fees, taxes, salary changes, contribution timing, plan changes and vesting are excluded. This is an illustration of compounding, not a promise that a match will produce that balance.

HSA: eligibility first An HSA requires eligible health coverage and other conditions, including no disqualifying coverage or Medicare enrollment. Qualified medical withdrawals can be tax-free; nonmedical withdrawals can be taxable, with an extra 20% tax before an exception such as age 65. For 2026, contribution limits are $4,400 self-only and $8,750 family before applicable catch-up or eligibility adjustments. Source 8, Source 9.

Brokerage: flexible does not mean tax-free A taxable brokerage account has no retirement-account age restriction on access, but selling can realize taxable gains or losses and investment income can create tax liabilities. Market losses, settlement rules and investment suitability still matter. Source 3.

Read the actual plan Find the match formula, cap, vesting schedule, contribution timing, fees and any Roth option. Compare the available investments. For IRA eligibility, check the current tax-year rules and filing status; avoid sharing personal tax data in public practice tools.

Practice with hypothetical figures Open the 401(k) Calculator to explore its stated assumptions. Start with age 35, retirement at 65, $0 balance, $60,000 salary, 6% contribution, 50% match up to 6%, 6% hypothetical annual return and no salary growth where supported. Compare a 3% contribution; timing and fees can make its projection differ from this annual match-only exercise.