2026 Contribution Limits and What Changed Under SECURE 2.0
The IRS contribution limits for 2026 represent the tax-advantaged ceiling on your retirement savings — every dollar of unused capacity is a permanent missed opportunity for tax-sheltered compounding. The 401(k) employee deferral limit for 2026 is $23,500, unchanged from 2025 due to inflation indexing thresholds. For participants aged 50 and older, a $7,500 catch-up contribution brings the total employee deferral to $31,000. But the biggest change under the SECURE 2.0 Act, which took full effect in 2025, is the new "super catch-up" for participants aged 60 through 63: this group can defer up to $11,250 instead of $7,500, pushing their total employee deferral to $34,750 — the highest individual 401(k) deferral limit in IRS history. On the IRA side, the annual contribution limit is $7,000 for 2026, with a $1,000 catch-up for those aged 50 and older bringing the total to $8,000. Unlike the 401(k) catch-up, the IRA catch-up has been a static $1,000 for over a decade without inflation indexing — though SECURE 2.0 mandates inflation adjustments to the IRA catch-up beginning in 2024, so this number may increase in future years. The total 401(k) limit under Section 415(c), which includes employee deferrals, employer matching contributions, and after-tax contributions, is $70,000 for 2026 ($77,500 for those 50+). This is the ceiling that governs the mega backdoor Roth strategy. For context, a worker who maxes out both a 401(k) at $23,500 and a Roth IRA at $7,000 shelters $30,500 per year from taxation — and if that worker is aged 60-63, the combined limit reaches $42,750. Over 25 years at a 7% average annual return, $30,500 in annual contributions grows to approximately $1.98 million. The difference between contributing $30,500 and contributing only the 6% needed for a typical employer match on a $100,000 salary ($6,000) is staggering: $1.98 million versus $389,000 over the same period. That $1.59 million gap is the cost of stopping at the match.
- 401(k) employee deferral 2026: $23,500 (under 50), $31,000 (age 50+), $34,750 (ages 60-63 under SECURE 2.0 super catch-up)
- IRA contribution 2026: $7,000 (under 50), $8,000 (age 50+) — SECURE 2.0 mandates future inflation indexing of the IRA catch-up
- Total 401(k) Section 415(c) limit: $70,000 ($77,500 for 50+) — includes employee deferrals, employer match, and after-tax contributions
- Combined 401(k) + IRA maximum for a worker under 50: $30,500/year in tax-advantaged space ($23,500 + $7,000)
- SECURE 2.0 super catch-up: ages 60-63 get $11,250 catch-up instead of $7,500 — the largest catch-up contribution ever available in a 401(k)
Pro Tip: If you are between 60 and 63, the SECURE 2.0 super catch-up is a limited window — it expires once you turn 64, and the standard $7,500 catch-up resumes. Maximize these years aggressively, as you will never have this level of 401(k) contribution capacity again.
Tax Treatment Head-to-Head: Pre-Tax, Roth, and the Income Phase-Outs
The IRA and 401(k) both come in Traditional (pre-tax) and Roth (after-tax) varieties, but their tax mechanics differ in critical ways that affect who benefits most from each. A Traditional 401(k) contribution reduces your current-year taxable income dollar-for-dollar with no income limit — a worker earning $250,000 can deduct the full $23,500, saving $7,755 at the 33% combined federal and state marginal rate. A Traditional IRA contribution is also deductible, but only if you (and your spouse, if married) are not covered by a workplace retirement plan, or if your Modified Adjusted Gross Income falls below the IRS phase-out thresholds. For 2026, the Traditional IRA deduction phases out between $79,000 and $89,000 for single filers covered by a workplace plan, and between $126,000 and $146,000 for married filing jointly (where the contributing spouse is covered). Above these thresholds, your Traditional IRA contribution is non-deductible — you still get tax-deferred growth, but you lose the upfront tax break that makes Traditional contributions compelling. This is precisely why high earners often find the Traditional IRA far less useful than the 401(k). The Roth side has its own constraints. There is no income limit on Roth 401(k) contributions — a worker earning $500,000 can contribute $23,500 to a Roth 401(k) with no restrictions. Roth IRA contributions, however, phase out between $150,000 and $165,000 for single filers and between $236,000 and $246,000 for married filing jointly in 2026. Above these thresholds, direct Roth IRA contributions are prohibited — though the backdoor Roth IRA (contributing to a non-deductible Traditional IRA and immediately converting to Roth) remains a legal workaround endorsed by IRS guidance. The core decision between Traditional and Roth hinges on one comparison: your current marginal tax rate versus your expected effective tax rate in retirement. If you earn $90,000 today (22% federal bracket) and expect $50,000-$60,000 in retirement income, Traditional wins — you save 22% now and pay 12-22% later. If you are early in your career at $55,000 (12% bracket) and expect income growth, Roth wins — you pay 12% now to avoid 22-24% or higher in retirement. When uncertain, splitting contributions between Traditional and Roth provides tax diversification that hedges against unpredictable future tax policy.
- Traditional 401(k): no income limit on deductibility — every dollar reduces AGI regardless of salary, saving tax at your marginal rate
- Traditional IRA deduction phase-out (2026): $79,000-$89,000 single (with workplace plan), $126,000-$146,000 MFJ — above these, no deduction
- Roth 401(k): no income limit — even $500,000+ earners can contribute the full $23,500 in after-tax dollars
- Roth IRA phase-out (2026): $150,000-$165,000 single, $236,000-$246,000 MFJ — above these, use the backdoor Roth IRA workaround
- Tax decision rule: if current marginal rate > expected retirement rate, Traditional wins; if current rate < expected retirement rate, Roth wins; if uncertain, split contributions for tax diversification
- SECURE 2.0 change: employer matching contributions can now be designated as Roth (previously always pre-tax) — check if your plan has adopted this option
The Employer Match Priority: Free Money You Cannot Replicate in an IRA
Before comparing IRA and 401(k) features, one factor overrides every other consideration: the employer match. If your employer matches 401(k) contributions, contributing at least enough to capture the full match is the single highest-return financial decision available to you — period. The math is unambiguous. The most common employer match formula in the United States is 50% of employee contributions on the first 6% of salary, according to Vanguard's "How America Saves 2025" report. On a $100,000 salary, this means contributing 6% ($6,000) earns a $3,000 employer match — an instant, guaranteed 50% return on your $6,000 contribution before any market movement. No IRA, no index fund, no alternative investment offers a risk-free 50% return. Some employers are more generous. Vanguard data shows 21% of plans offer a dollar-for-dollar match (100% on 3-6% of salary), and a growing number of technology and finance firms match 50% on 8-10% of pay. T. Rowe Price's 2024 Benchmarking Report found the average total employer contribution (match plus any non-elective contributions) is 4.7% of salary — worth $4,700 per year on a $100,000 income. Over a 30-year career at 7% average returns, that $4,700 annual employer match alone grows to approximately $444,000. Yet Vanguard reports that 57% of 401(k) participants do not contribute enough to capture the full employer match, forfeiting an average of $1,336 per year in free money. The opportunity cost of that behavioral gap, compounded at 7% over 30 years, is approximately $126,000 in lost retirement wealth — wealth your employer was literally offering to give you. There is no IRA equivalent to the employer match. An IRA is a self-funded account with no third-party contributions. This is why every financial planner, every piece of credible research, and every contribution order framework begins with the same instruction: contribute to the 401(k) up to the full employer match before funding any other retirement account.
- Most common match: 50% on first 6% of salary (Vanguard 2025) — a $100,000 earner contributing 6% receives $3,000 in free employer money
- 21% of plans offer dollar-for-dollar matching (100% on 3-6% of salary) — an instant 100% guaranteed return on contributed dollars
- Average total employer contribution: 4.7% of salary (T. Rowe Price 2024) — $4,700/year on $100,000 income, growing to ~$444,000 over 30 years at 7%
- 57% of participants leave match money on the table, forfeiting an average of $1,336/year (Vanguard 2025) — a $126,000 lifetime cost at 7% compounding
- No IRA offers an employer match — this is the 401(k)'s single most powerful and irreplaceable advantage
Pro Tip: Log into your 401(k) provider portal today and verify your contribution rate against your employer's matching formula. If there is any gap — even 1% — you are forfeiting a guaranteed return that no market investment can replicate. Fixing this takes five minutes and is the highest-ROI financial action most workers can take.
Investment Selection and Fees: Where the IRA Dominates
Once you have captured the full employer match, the comparison shifts to the feature where the IRA has a decisive, structural advantage: investment selection and costs. A 401(k) plan is curated by your employer and their chosen plan administrator. The typical 401(k) offers between 15 and 30 investment options — a constrained menu that may or may not include the lowest-cost funds available. BrightScope's 2024 Defined Contribution Plan Landscape report analyzed over 650,000 plans and found that the average 401(k) plan charges total plan costs (investment fees plus administrative fees) of 0.89% of assets for small plans (under $10 million) and 0.36% for large plans (over $1 billion). The variance is enormous — a worker at a Fortune 500 company with a Vanguard or Fidelity institutional plan might pay 0.02-0.05% in fund expense ratios, while a worker at a small business with a poorly negotiated plan might pay 0.80-1.50% on the same underlying index exposure. An IRA, by contrast, gives you access to the entire universe of publicly available mutual funds, ETFs, and individual securities. At Fidelity, you can hold FZROX (Fidelity ZERO Total Market Index Fund) at a 0.00% expense ratio, FZILX (Fidelity ZERO International Index Fund) at 0.00%, and FXNAX (Fidelity U.S. Bond Index Fund) at 0.025%. At Vanguard, VTI (Vanguard Total Stock Market ETF) charges 0.03%, VXUS (Vanguard Total International Stock ETF) charges 0.05%, and BND (Vanguard Total Bond Market ETF) charges 0.03%. These are institutional-grade costs that many 401(k) plans cannot match. The compounding impact of fee differences is enormous. Morningstar's Predictive Power of Fees study (updated 2024) confirmed that expense ratios remain the single most reliable predictor of future fund performance across every asset class and time period. A 1% annual fee difference on a $500,000 portfolio over 30 years at 7% gross returns costs approximately $215,000 in foregone wealth — the lower-cost investor ends with $3.81 million versus $2.87 million for the higher-cost investor, all else equal. This is why the IRA earns its place in the contribution order immediately after the 401(k) match threshold: the fee savings and fund flexibility compound into a meaningful wealth advantage over decades.
- Average 401(k) total plan cost: 0.89% for small plans (<$10M assets), 0.36% for large plans (>$1B) — BrightScope 2024 data across 650,000+ plans
- IRA fund options: Fidelity ZERO funds at 0.00% ER, Vanguard ETFs at 0.03-0.05% ER — unrestricted access to the lowest-cost funds on the market
- 401(k) plans typically offer 15-30 funds; IRAs offer access to 10,000+ mutual funds and ETFs with no plan administrator gatekeeper
- Morningstar 2024: expense ratios are the single best predictor of future fund performance — low-cost funds outperform high-cost funds in every asset class
- 1% fee difference over 30 years on $500,000: $215,000 in foregone wealth ($3.81M vs $2.87M at 7% gross return)
- Check your 401(k) fund lineup: if the lowest-cost S&P 500 or total market fund in your plan charges >0.15%, the IRA fee advantage is material
Roth IRA Advantages That Go Far Beyond Retirement
The Roth IRA is not merely a retirement account — it is the most flexible tax-advantaged vehicle in the entire Internal Revenue Code, offering benefits that no 401(k) or Traditional IRA can match. Understanding these unique features is critical to making an informed prioritization decision. First, the Roth IRA has no Required Minimum Distributions. Traditional 401(k)s and Traditional IRAs force withdrawals beginning at age 73 under SECURE 2.0, regardless of whether you need the money. These RMDs are taxed as ordinary income and can push retirees into higher tax brackets, trigger IRMAA surcharges on Medicare premiums, and increase the taxable portion of Social Security benefits. The Roth IRA has zero RMDs for the original account owner — your money can grow tax-free for your entire lifetime and be passed to heirs (who will have RMDs under the SECURE Act 10-year rule, but all distributions remain tax-free). Note that as of 2024, SECURE 2.0 also eliminated RMDs for Roth 401(k) accounts — but if you leave your employer, rolling the Roth 401(k) to a Roth IRA remains advisable to avoid potential future legislative changes. Second, Roth IRA contributions (not earnings) can be withdrawn at any time, for any reason, with no taxes and no penalties. This is a unique feature not available in any 401(k). A worker who has contributed $35,000 to a Roth IRA over five years can withdraw up to $35,000 penalty-free and tax-free at any age — making the Roth IRA a functional emergency fund backstop while the money continues to grow. Third, qualified Roth IRA withdrawals (after age 59.5 and the 5-year rule) are completely excluded from taxable income. This exclusion does not increase your Medicare premiums, does not trigger the 3.8% Net Investment Income Tax, and does not make Social Security benefits taxable. For retirees managing their taxable income carefully, Roth distributions are invisible to the tax code. Fourth, the Roth conversion ladder — converting Traditional IRA or 401(k) funds to Roth, paying tax on the conversion, and then accessing the converted amounts penalty-free after five years — is the cornerstone withdrawal strategy for early retirees seeking to access retirement funds before age 59.5. Each year's conversion starts its own five-year clock, creating a rolling ladder of accessible funds. Finally, the Roth IRA integrates powerfully with estate planning. Heirs inherit tax-free distributions, making the Roth IRA the most tax-efficient wealth transfer vehicle available to non-ultra-high-net-worth households.
- No RMDs for the original Roth IRA owner — money grows tax-free for life, unlike Traditional accounts that force taxable withdrawals at age 73
- Contributions withdrawable anytime tax-free and penalty-free — $35,000 in past contributions means $35,000 accessible as an emergency backstop at any age
- Qualified withdrawals excluded from taxable income — no impact on Medicare IRMAA premiums, Social Security taxation, or the 3.8% NIIT surtax
- 5-year rule: earnings are tax-free only after the account is 5 years old AND you are 59.5+ — open your first Roth IRA as early as possible to start this clock
- Roth conversion ladder: convert Traditional funds to Roth annually, wait 5 years per conversion, then access funds penalty-free before 59.5 — the core early retirement withdrawal strategy
- Estate planning: heirs receive tax-free Roth IRA distributions (subject to the 10-year distribution rule under the SECURE Act) — the most tax-efficient intergenerational wealth transfer for most families
Pro Tip: Even if you can only contribute $1,000 to a Roth IRA this year, do it — the 5-year clock starts from your first contribution to any Roth IRA, not from each individual contribution. Opening the account early ensures the clock is running while you build income to contribute more in future years.
The Optimal Contribution Order: Where Every Dollar Should Go
The most critical insight in retirement account planning is not which account is "better" — it is the sequence in which you fund them. Fidelity's research on contribution optimization indicates that workers who follow the evidence-based contribution order accumulate approximately 37% more after-tax wealth over 30 years compared to those who simply maximize the 401(k) first and ignore other accounts. The optimal contribution order for most W-2 employees in 2026, backed by research from Fidelity, Vanguard, and the financial planning community, follows a specific hierarchy designed to maximize guaranteed returns first, then tax efficiency, then total contribution volume. Step 1 is to contribute to your 401(k) up to the full employer match. As established, this is a guaranteed 50-100% return. No optimization strategy should ever bypass this step. On a $100,000 salary with a 50% match on 6%, this means contributing $6,000 to capture the $3,000 match. Step 2 is to max your Health Savings Account if you are enrolled in a qualifying HDHP. The 2026 HSA limit is $4,300 individual or $8,550 family. The HSA is the only triple-tax-advantaged account: deductible contributions (which also avoid FICA through payroll deduction), tax-free growth, and tax-free withdrawals for qualified medical expenses. After age 65, non-medical withdrawals are penalty-free and taxed as ordinary income, making it a super-Traditional IRA. Step 3 is to max your Roth IRA at $7,000 ($8,000 if 50+). The unlimited fund selection, lowest available expense ratios, no RMDs, and penalty-free contribution access make this the highest-priority account after the HSA for most workers. If your MAGI exceeds the Roth IRA phase-out ($150,000 single / $236,000 MFJ for 2026), execute the backdoor Roth IRA strategy. Step 4 is to return to your 401(k) and increase contributions from the match threshold up to the full $23,500 limit ($31,000 if 50+, $34,750 if 60-63). This maximizes your tax-deferred contribution room even though the fund selection may be inferior to your IRA. Step 5 is the mega backdoor Roth, if your plan allows after-tax contributions and in-plan Roth conversions or in-service withdrawals. This unlocks the remaining room between your employee deferral, employer match, and the $70,000 Section 415(c) total limit — potentially $30,000-$40,000 per year in additional Roth contributions. Step 6, for those who have exhausted all tax-advantaged space, is a taxable brokerage account invested in tax-efficient index funds. This order ensures that every dollar flows to the account offering the highest marginal benefit at each level of savings capacity.
- Step 1: 401(k) to employer match — guaranteed 50-100% return; always the first priority regardless of any other factor
- Step 2: Max HSA ($4,300 individual / $8,550 family) — triple tax advantage; the most tax-efficient account in the U.S. tax code
- Step 3: Max Roth IRA ($7,000 / $8,000 if 50+) — lowest fees, unlimited fund choice, no RMDs, penalty-free contribution access; backdoor if above income limit
- Step 4: Max remaining 401(k) ($23,500 / $31,000 / $34,750) — tax-deferred compounding with full AGI reduction for Traditional contributions
- Step 5: Mega backdoor Roth — after-tax 401(k) contributions up to $70,000 total limit, converted to Roth; requires plan support
- Step 6: Taxable brokerage — tax-efficient index funds (VTI, VXUS) for savings beyond all tax-advantaged capacity
Pro Tip: Use the WealthWise OS FIRE Calculator to model your personal contribution order. Input your salary, employer match formula, tax bracket, and available accounts — the tool calculates the exact optimal allocation and shows the 10-, 20-, and 30-year after-tax wealth impact of each step.
Self-Employed Retirement Accounts: Solo 401(k), SEP-IRA, and SIMPLE IRA
Self-employed workers and small business owners have access to retirement accounts that W-2 employees do not — and the contribution limits are substantially higher than standard IRAs. The choice between a Solo 401(k), SEP-IRA, and SIMPLE IRA depends on your business structure, income level, and whether you have employees. The Solo 401(k), also called the Individual 401(k), is the most powerful option for self-employed individuals with no employees other than a spouse. In 2026, you can defer up to $23,500 as the employee (plus the $7,500 catch-up if 50+, or $11,250 if 60-63), and contribute up to 25% of net self-employment income as the employer, for a combined total of up to $70,000 ($77,500 if 50+). The Solo 401(k) also supports both Traditional and Roth employee deferrals, and many providers (Fidelity, Schwab, E*TRADE) allow after-tax contributions for the mega backdoor Roth strategy. A freelancer earning $150,000 in net self-employment income could contribute $23,500 in employee deferrals plus approximately $27,850 in employer contributions (25% of net SE income after the self-employment tax deduction), totaling $51,350 in a single year. The SEP-IRA (Simplified Employee Pension) allows contributions of up to 25% of net self-employment income, capped at $70,000 for 2026. The setup is simpler than a Solo 401(k) — no annual Form 5500-EZ filing, no plan document amendments — but it lacks Roth contributions, does not allow employee deferrals (the entire contribution is employer-funded), and offers no loan provisions. A freelancer earning $100,000 in net SE income can contribute approximately $18,587 to a SEP-IRA (25% of net income after the SE tax deduction). The same freelancer could contribute $23,500 in employee deferrals plus $18,587 in employer contributions to a Solo 401(k), totaling $42,087 — a $23,500 advantage. The SIMPLE IRA (Savings Incentive Match Plan for Employees) is designed for small businesses with fewer than 100 employees. The 2026 employee contribution limit is $16,500 ($20,000 if 50+), with an employer match of up to 3% of compensation or a 2% non-elective contribution. While the SIMPLE IRA is easier to administer than a 401(k) for businesses with employees, its lower contribution limits and lack of Roth options make it the weakest self-employed retirement vehicle for maximizing contributions. One underutilized strategy: if you have a side hustle generating self-employment income in addition to W-2 employment, you can open a Solo 401(k) for the side business. The $23,500 employee deferral limit is shared across all 401(k) plans (including your employer's), but the employer contribution is calculated independently per business. This means your side hustle can contribute up to 25% of its net SE income as an employer contribution on top of your maxed-out W-2 401(k), unlocking additional tax-advantaged savings.
- Solo 401(k) total limit: $70,000 ($77,500 if 50+) — $23,500 employee deferral + up to 25% of net SE income as employer contribution; supports Roth deferrals and mega backdoor
- SEP-IRA limit: 25% of net SE income, up to $70,000 — simpler setup but no Roth option, no employee deferrals, and no loan provision
- SIMPLE IRA: $16,500 employee contribution ($20,000 if 50+) + 3% employer match — lowest limits, designed for small businesses with employees
- Solo 401(k) advantage over SEP-IRA on $100,000 net SE income: $42,087 vs $18,587 — a $23,500 difference due to the employee deferral component
- Side hustle strategy: open a Solo 401(k) for self-employment income; the employer contribution is calculated independently even if you max your W-2 employer's 401(k)
- Providers offering Solo 401(k) with Roth and after-tax options: Fidelity, Schwab, E*TRADE — avoid providers that restrict plan features
Pro Tip: If you freelance or have any 1099 self-employment income — even $10,000-$20,000 per year from a side gig — opening a Solo 401(k) unlocks an additional employer contribution of up to 25% of that net income. This is one of the most powerful and underutilized tax strategies for workers with both W-2 and self-employment income.
Decision Framework: The Right Priority for Your Specific Scenario
The optimal IRA vs 401(k) prioritization depends on your income level, career stage, employer benefits, and tax situation. Rather than a single universal answer, here is the specific recommended priority order for five common scenarios, drawn from the principles established throughout this analysis. Scenario 1: Single, early career, income $45,000-$65,000, employer offers 401(k) with match. Your priority is 401(k) to match, then Roth IRA to max. At this income level, you are likely in the 12-22% federal bracket — one of the lowest you will ever face — making Roth contributions exceptionally valuable because you pay a low tax rate now to avoid higher rates later. The IRA's superior fund selection and fee structure compound this advantage. If money remains after maxing the Roth IRA, increase 401(k) contributions toward the $23,500 limit. Scenario 2: Dual-income household, combined income $150,000-$250,000, both have 401(k) access. Both spouses should contribute to their 401(k)s up to the full match first. Next, each maxes a Roth IRA ($14,000 combined). If income is below the Roth IRA phase-out ($236,000 MFJ), contribute directly; if above, use the backdoor Roth. Then return to both 401(k)s and increase toward the $23,500 limit each ($47,000 combined). Consider splitting Traditional and Roth 401(k) contributions for tax diversification given your mid-to-high bracket. This household can shelter up to $75,000 per year across all accounts ($47,000 in 401(k)s + $14,000 in IRAs + $8,550 in family HSA + $5,450 in remaining 401(k) capacity). Scenario 3: High earner, income above $250,000, single or married. At this income level, direct Roth IRA contributions are prohibited — execute the backdoor Roth IRA. Your 401(k) is your primary tax shelter: max Roth or Traditional 401(k) to $23,500, then pursue the mega backdoor Roth if your plan allows it (potentially $30,000-$40,000 additional per year). The Roth 401(k) has no income limit, making it the most accessible Roth vehicle for high earners. A deferred compensation plan (Section 457(b) for government or non-profit, or non-qualified deferred comp for corporate) may offer additional deferral. Scenario 4: Self-employed, no W-2 employer. Open a Solo 401(k) immediately. Max the employee deferral at $23,500 and add up to 25% of net SE income as the employer contribution. Also max a Roth IRA at $7,000 (backdoor if income is too high). The Solo 401(k) replaces the employer-plan 401(k), and its higher total limit ($70,000) makes the SEP-IRA unnecessary in most cases. If you have employees, consider a SEP-IRA for simplicity or a SIMPLE IRA for lower administrative burden. Scenario 5: Late starter, age 50+, behind on retirement savings. Maximize every catch-up provision: 401(k) at $31,000 ($34,750 if 60-63), IRA at $8,000, HSA at $5,300 (with $1,000 catch-up). Prioritize Roth contributions if you expect tax rates to be similar or higher in retirement — many late starters have peak earnings in their 50s and will see income drop in retirement, which might favor Traditional contributions to capture the deduction at a high marginal rate and pay lower rates on withdrawal. Run both scenarios in a retirement tax projection tool before deciding.
- Early career ($45K-$65K): Match first, then Roth IRA to max — pay low taxes now to lock in tax-free growth for 30+ years
- Dual-income ($150K-$250K): Both spouses to match, then both Roth IRAs, then both 401(k)s to max — up to $75,000/year in combined tax-advantaged savings
- High earner ($250K+): Backdoor Roth IRA, max 401(k) (no income limit on Roth 401(k)), mega backdoor Roth — Roth 401(k) is the primary Roth vehicle
- Self-employed: Solo 401(k) to $70,000 total ($23,500 deferral + 25% employer), plus Roth IRA — more powerful than SEP-IRA due to employee deferral component
- Late starter (50+): Max every catch-up — $31,000-$34,750 in 401(k), $8,000 IRA, $5,300 HSA — and consider Traditional contributions at peak marginal rates to capture larger deductions
Pro Tip: Your scenario will evolve over your career. Re-evaluate your contribution priority annually — a raise, job change, marriage, or side income can shift the optimal order. Use the WealthWise OS Dashboard to track all accounts in a single view and ensure every dollar of tax-advantaged space is being used.