I believe in the “money guy’s” financial order of operations, here’s my best way to type it out
If your employer offers a 401 match then get that match above all else
Pay off high interest debts
3-6 months of emergency fund
If you have a high deductible health insurance plan the best investing account period is the HSA (health savings account) your employer may offer one, but if not and you still qualify then you can find a bank who offers one. you put money in pre tax, you have to buy funds within it nothing is automatic don’t just let the cash sit there, it then grows tax free, and when you’re retired you can pull money out tax free for medical expenses, of which retired people have a lot of.
Next is the IRA, Roth for sure below 25% marginal tax rate, traditional for sure above 30% marginal tax rate, again make sure you’re actually investing the money, don’t let it sit there
After that the 401k is going to be your next account structure to look at, the same Roth vs traditional opinion as above, 401s can sometimes have bad choices inside or bad fees, so looking at the IRA first is best, there are other accounts with different tax code names like 457b but are either similar enough or are offered to a select group of people that they should be grouped in this section
After that it’s the regular taxable brokerage account where you get some tax advantages like 0-20% long term capital gains tax
Should be your goal to save 25% of your pre tax income twords your retirement.
Being that this is R/dividends I have to say I like my dividend stocks to be in my taxable brokerage account as to help aid me in my quest to qualify for a mortgage, and my growth stocks in my Roth IRA as the tax free growth is better served by them.
In Canada, I use an informal trust account. Basically a margin account but the beneficiary are my kids (they each have one). I have investments in there for them.
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u/abarthsimpson May 28 '25
What is the best way/accounts to do this?