The Savings Order

Where should your next dollar go?

When you have more to save than places that feel urgent, the order matters. Fill each level before you move to the next, and every dollar does the most work it can.

1. 1
   Capture the full employer match

   Free money

   Your 401(k), 403(b), or 457(b) match is an instant 50% to 100% return. Take all of it before anything else.

2. 2
   Wipe out high-interest debt

   Above 6%

   Anything over about 6% is a guaranteed loss you can erase. Clear it before you invest another dollar.

3. 3
   Fund an HSA

   Triple tax benefit

   Deductible going in, tax-free growth, and tax-free out for medical costs. The only account the IRS never touches, if you qualify.

4. 4
   Max out your retirement plans

   Tax deferred

   Fill the 401(k), 403(b), or 457(b) to the limit. You skip the tax now and let it compound untouched.

5. 5
   Do the backdoor Roth IRA

   Tax diversification

   A second bucket that grows and comes out tax-free, giving you control over your tax bracket in retirement.

6. 6
   Build a taxable brokerage account

   Flexible money

   No contribution limits and no withdrawal rules. This is the money that funds an early retirement or a big goal.

7. 7
   Fund your other goals

   Giving and education

   Put surplus toward what matters next, like a donor-advised fund for giving or a 529 for a child's or grandchild's education. Invest these the same way, in low-cost index funds.

8. 8
   Pay off low-interest debt

   Below 4%

   A low-rate mortgage can wait. Clear it last, once the higher-return moves are already done.