The Retirement Stack

Here's the optimal order for retirement savings:

Step 1: Contribute to your 401(k) up to the employer match. (Free money first.)

Step 2: Max out a Roth IRA ($7,500/year in 2026, or $8,600 if you're 50+). Tax-free growth is too powerful to skip.

Step 3: Go back and max out your 401(k) ($24,500 employee deferral limit in 2026, before catch-up contributions).

Step 4: If you've maxed everything, use a taxable brokerage account with tax-efficient index funds.

This isn't about being rich. Someone earning $50,000 who saves 15% ($7,500/year) from age 25 can retire a millionaire. The system is designed to reward consistency over time, not heroic one-time contributions.