Should You Max Out Your HSA After Maxing Your 401(k)?

Once you’ve maximized your 401(k) contributions, the question becomes: where should your next investment dollars go? According to financial expert Dave Ramsey and his team at Ramsey Solutions, high-income earners who max out their 401(k) plans have several strategic options to continue building retirement wealth. Among these alternatives, your Health Savings Account (HSA) deserves special consideration as part of a comprehensive retirement strategy.

Individual Retirement Accounts: Your Next Logical Step

Beyond your workplace 401(k), an Individual Retirement Account (IRA) or Roth IRA represents the most straightforward next move for retirement savings. The key advantage: you’re not limited to just one type of retirement account. You can simultaneously contribute to both a 401(k) and an IRA, giving you multiple pathways to save for your future.

The difference between these accounts matters. A traditional IRA lets you contribute pre-tax dollars (reducing your current taxable income), while a Roth IRA accepts after-tax contributions but offers tax-free growth and withdrawals in retirement. For 2026, you can contribute up to $8,000 to an IRA if you’re under 50, or $10,000 if you’re 50 or older.

This flexibility makes IRAs an attractive option immediately after maxing out your 401(k), especially if you haven’t yet reached your annual IRA contribution limit.

Brokerage Accounts: Ultimate Investment Freedom

A taxable brokerage account—also called a non-qualified investment account—offers something retirement accounts cannot: unlimited contributions and complete investment flexibility. Unlike 401(k)s and traditional IRAs, brokerage accounts have no required minimum distributions, no income restrictions, and no contribution caps.

This unlimited potential comes with a trade-off: you’ll owe capital gains taxes on investment profits. However, the flexibility often outweighs this consideration. You can withdraw money whenever you need it without penalties, invest in virtually any securities you choose, and avoid the age-based restrictions that apply to retirement accounts. For investors seeking maximum control over their money, brokerage accounts provide an excellent complement to tax-advantaged retirement plans.

Real Estate: A Tangible Alternative Investment Path

Beyond paper assets, real estate investing offers inflation protection and potentially substantial returns—but it demands serious commitment. Unlike passive stock investments, rental properties require active management, ongoing maintenance costs, substantial upfront capital, and careful financial planning.

Before pursuing real estate as an investment, ensure you’ve paid off your primary mortgage, work with experienced real estate professionals, and have sufficient cash reserves. The rewards can be significant, but real estate isn’t a passive income source for the unprepared.

Why You Should Consider Maximizing Your HSA

Here’s where many high-income investors overlook a powerful tool: the Health Savings Account. While HSAs primarily serve as dedicated medical expense savings vehicles, they offer surprising retirement benefits that deserve serious attention when deciding whether to max out your HSA.

An HSA provides what financial experts call “triple tax advantage”—contributions are pre-tax (reducing taxable income), growth is tax-free, and withdrawals for qualified medical expenses are tax-free. Once you reach age 65, your HSA transforms into something resembling a traditional IRA. At that point, you can withdraw funds for any purpose, though non-medical withdrawals become subject to income tax.

For 2026, individuals can set aside up to $4,300 annually in an HSA (or $8,550 for families with coverage). Because HSAs have no annual withdrawal requirements, you can let contributions accumulate and grow year after year, effectively turning your HSA into a powerful long-term wealth-building tool.

The strategic advantage: if you can afford to pay medical expenses from current cash flow rather than depleting your HSA, you’ve created a tax-advantaged retirement account with exceptional growth potential. Combined with your maxed-out 401(k) and potential IRA contributions, maximizing your HSA creates a diversified, tax-efficient retirement savings structure.

Putting It All Together

For those fortunate enough to max out their 401(k), the next steps should follow a logical progression: fully fund an IRA or Roth IRA, consider opening a brokerage account for unlimited investing flexibility, explore real estate if you have the capital and commitment, and importantly, maximize your HSA contributions. Each vehicle serves a specific purpose in comprehensive wealth building, and using all available options creates maximum tax efficiency and retirement security.