The standard funding order and why it works
A widely cited funding hierarchy for US retirement savers orders accounts by tax efficiency. The first priority is contributing enough to a workplace 401(k) to capture the full employer match, because the match is an immediate guaranteed return on contributions. Next comes a Health Savings Account (HSA) for those with an eligible high-deductible health plan, which is uniquely triple tax-advantaged: contributions, growth, and qualified medical withdrawals are all untaxed.
After the HSA, the common ordering favors a Roth IRA (tax-free growth and withdrawals), then maxing the remaining 401(k) space, and finally a regular taxable brokerage account once the sheltered accounts are full.
Caveats that change the order
The Roth versus traditional decision hinges on whether you expect a higher or lower marginal tax rate in retirement than today. High earners may favor pre-tax traditional contributions now, while younger savers in lower brackets often prefer Roth.
Contribution limits, income phase-outs for Roth eligibility, and access to a workplace plan all shift the path. The hierarchy is a default heuristic, not a rule, and individual tax situations can reorder it.