Don’t think you have to stop saving money for the future.
IRS increases 401(k) contribution limits for 2026
The IRS will increase 401(k) and catch-up contribution limits for 2026, allowing workers to save up to $32,500 for retirement.
Many people struggle to save money for retirement. So if you’re in a position to get the most out of your IRA, consider that you’re ahead of the game.
But while maxing out your IRA is great, it may not be enough to meet your retirement savings goals. That’s because this year’s IRA limit is $7,500 for workers under 50 and $8,600 for those over 50. In contrast, a 401(k) allows you to contribute up to $24,500 this year if you’re under 50 and up to $32,500 if you’re 50 or older.
Of course, maxing out your IRA over a long career could be enough to make you a millionaire in retirement. But if you want to up your savings game, you may be inclined to look outside of your IRA.
For some people, supplementing IRA contributions with a 401(k) may be an option. However, if your company doesn’t offer a 401(k) plan, it may be off the table.
The good news is that there are other accounts you can consider to build your retirement nest egg. It may not seem like a good choice at first. But dig deeper and you’ll see why it’s the best choice.
HSAs also function as retirement savings accounts
What’s so great about Health Savings Accounts (HSAs) is that they’re 3x more tax-advantaged. When using HSA:
- Donations are made on a pre-tax basis
- Investment profits are tax-free
- Withdrawals are tax-free as long as they are used for qualified medical expenses
At first, an HSA may not seem like a great retirement savings tool. After all, the main purpose of these accounts is to help people save and cover their medical costs.
However, HSAs can also function as retirement accounts for several reasons. First, funds do not have an expiration date. You can carry the balance into retirement and use it to cover your future medical needs.
Second, there are penalties for using your HSA for non-medical purposes. However, this is limited to those up to the age of 65. Once you turn 65, you can use your HSA for any reason without penalty.
In that case, you will have to pay taxes on the withdrawal. But it’s no different than a traditional IRA.
To qualify for an HSA, you must enroll in a high-deductible health insurance plan that meets certain requirements. The criteria changes every year, so it’s best to check with your benefits administrator to see if your health plan qualifies.
But if that happens, maxing out your HSA can be a great supplement to your IRA. You may also want to prioritize HSA contributions, as they offer even more tax benefits than IRAs.
Another backup option to consider
Your IRA may be maxed out, you may not have a 401(k), or your health insurance plan may not be compatible with your HSA. If that’s the case, don’t take your retirement savings beyond your IRA.
A taxable brokerage account allows you to invest your money and save it for your retirement. There are no donation limits, withdrawal rules or restrictions.
As the name suggests, these accounts are not tax deductible. But if you’ve exhausted all other options, a taxable brokerage account may be your backup plan.
As a bonus, a tax brokerage account gives you more options for early retirement. It’s actually beneficial to incorporate taxable accounts to some extent into your strategy, since you don’t have to worry about early withdrawal penalties like with an IRA, and you don’t have to wait until age 65 to take a withdrawal for any reason like with an HSA.
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