The order to fill retirement accounts

When money is limited, the order you fill accounts matters. A common sequence looks like this.

• Get the employer match. It is an immediate return on your contribution.
• Clear high-interest debt. Paying off a card with a high rate beats most investment returns.
• Use tax-advantaged accounts. Traditional and Roth accounts treat tax differently. Pick based on whether you expect a higher tax rate now or later.
• Invest the rest. A regular taxable account covers anything beyond the limits.

Rules and limits change each year, so check the current figures or speak to an advisor before you decide.