Tax-advantaged accounts at a glance

The U.S. tax code treats different account types very differently. Knowing what each one does is one of the highest-leverage moves in personal finance.

Tax-deferred (pay tax later)

• Traditional 401(k) and Traditional IRA — you contribute pre-tax money. It grows untaxed until you withdraw it in retirement, when it is taxed as ordinary income.
• 457 and 403(b) — government and nonprofit employee versions of the 401(k). Similar rules.

Tax-free (pay tax now, never again on growth)

• Roth 401(k), Roth IRA — contribute post-tax money. All future growth and qualified withdrawals are tax-free.
• Health Savings Account (HSA) — if you have a qualifying high-deductible health plan, the HSA is uniquely powerful: tax deduction going in, tax-free growth, tax-free withdrawals for medical costs. Often called the triple tax advantage.
• 529 plans — for education expenses. Contributions are post-tax (sometimes state-tax deductible); growth and qualified education withdrawals are tax-free.

Taxable (no special treatment)

A regular brokerage account. No contribution limits, no withdrawal restrictions. But every dividend, interest payment, and realized gain is taxable in the year it happens.

Common priority order

A common educational framework: contribute to your 401(k) up to the employer match → pay off high-interest debt → fully fund an HSA if eligible → max a Roth IRA → return to maxing the 401(k) → invest the rest in a taxable brokerage account. Your situation may differ. This is a starting point, not a personal recommendation.