Should I max my IRA or 401k first after a raise?
Standard financial advice recommends grabbing the employer match, switching to max out an IRA, and then returning to the 401k, leaving savers confused about the underlying strategy. This rigid order makes it difficult to figure out how to balance competing financial goals like paying off cars, saving for a house, or investing in a brokerage account.
What people tried
Every workaround mentioned in the threads below. We haven’t tested any of them — and nobody here is claiming they worked.
Found another way around this?
Share your steps and trade-offs so fellow engineers don't have to reinvent the wheel. No account required.
- 1increasing 401k contribution while lowering IRA contribution to maintain the same take-home payDid this help you?
- 2maximizing the employer match first, then maxing out the IRA, and returning to the 401kDid this help you?
- 3Making spreadsheets to project annual savingsDid this help you?
- 4Living off two incomes and pretending the third one doesn't existDid this help you?
- 5Putting extra monthly payments toward car loansDid this help you?
- 6Contributing to both accounts simultaneouslyDid this help you?
- 7Reducing the 403(b) contribution down to the minimum required to capture the full employer match and shifting the rest to the 457(b)Did this help you?
- 8Using backdoor Roth IRAs and evaluating the rule of 55 for 403(b) withdrawalsDid this help you?
- 9Contributing to both accounts to capture matching perks sequentially, such as filling the 401k up to the employer match first before funding an IRA.Did this help you?
- 10Investing into a taxable brokerage after maxing out Roth accountsDid this help you?
- 11Spreading monthly contributions proportionally across multiple accountsDid this help you?
- 12Contributing as much as the budget allows up to the legal limitDid this help you?
- 13Asking HR how much to contribute to get the full matchDid this help you?
- 14Maxing out a Roth IRA first and putting the rest into the 401(k)Did this help you?
- 15Contributing to an HSA if availableDid this help you?
- 16Asking strangers online, reading internet websites, and checking forums.Did this help you?
- 17Leaving existing traditional balances alone while directing new contributions to a Roth accountDid this help you?
- 18Researching marginal tax rates now versus expected tax rates in retirementDid this help you?
- 19Selling assets from a taxable account to fund living expenses while maximizing payroll deductions for retirement accounts.Did this help you?
- 20continuing to invest at the current rateDid this help you?
- 21switching contributions from a 403b to a 457 to plan for early retirementDid this help you?
- 22establishing a six-month emergency fundDid this help you?
- 23Reviewing the Prime Directive in the personal finance WikiDid this help you?
- 24Allocating funds between cash management accounts and tax-advantaged retirement accountsDid this help you?
- 25Contributing 11% per paycheck despite the lack of an employer matchDid this help you?
- 26keeping inheritance assets in separate accountsDid this help you?
- 27using joint liquid cash for contributionsDid this help you?
- 28Following investment order-of-operations flowcharts from FIRE communities.Did this help you?
- 29Setting up a simple index fund portfolio and leaving it on autopilot.Did this help you?
- 30Using dollar-cost averaging instead of trying to time the market.Did this help you?
In their words
Unedited, grouped by where they were said, most upvoted first within each place, each linked to the thread it came from.
“what would happen if we invested almost all (we can actually invest 99%) of our salary into our company's Roth 401k?”source ↗
“For living expenses, we would systematically sell the necessary amount (maybe $2000/month) out of the taxable account.”source ↗
“I am trying to make sure what I am contributing enough to retirement, but I don't really have anyone to ask about it other than strangers online or by checking websites/ the internet and such.”source ↗
“However, Spouse 1 is concerned that we're not maximizing tax deductions for 2026 by maximizing Spouse 2's 401k/IRA contributions when there is money just sitting in joint accounts. But reluctant to revert it from commingled accounts to in spouse's name only.”source ↗
“Why is the recommendation to reach the employer match and then max IRA and then increase 401k after that? Am I missing a piece of information that I should be considering?”source ↗
“Should I do a split for example 1.5k into each roth then 1k into brokerage? Or should I just focus on maxing out both roths first and then spend the rest of the year funding the brokerage? Does it even matter?”source ↗
“Can I keep contributing to my 401(k) even with 0% employer match?”source ↗
“I’m 26 and trying to figure out what makes the most sense for my retirement savings and overall financial goals.”source ↗
“My question is whether it makes sense to keep putting this much into my 401(k) even though there’s no employer match, or whether I should be putting some of that money into a Roth IRA, taxable brokerage account, or somewhere else.”source ↗
“Is this a good plan? Should I change to a different fund? Am I behind for my age? Any suggestions or help is appreciated”source ↗
“My current employer matches up to 5% in the 403(b). I am currently enrolled in the Traditional version. At next open enrollment, I'm thinking about going to the Roth version.”source ↗
“If I do this, do I just leave the Traditional alone? And have two different piles of money? I'm only a year into the Traditional.”source ↗
“Any pros/cons/traps/advice for doing this?”source ↗
“I know there's a lot of advice regarding retirement planning, but I'm still struggling a bit to really understand how to be most efficient with my contributions, especially when it comes to Roth IRA (never had one) vs. 401(k) which is my current primary retirement fund, balancing with mortgage, etc. especially considering current market conditions.”source ↗
“Any advice on how I should adjust current investments, reevaluate future contribution strategy, perhaps what to watch for in the market to determine if I should sell any brokerage shares now in anticipation of market dips to buy?”source ↗
“I currently make around $60,000 per year, so I’m trying to figure out what makes the most sense for me in the short term.”source ↗
“For now, though, would it make more sense to reduce my 403(b) contribution to the 4% required to receive the full 10% employer contribution and direct the difference toward my 457(b)? Or is there a reason I should continue contributing more heavily to the 403(b)?”source ↗
“One thing I’m particularly interested in is whether a pre-tax governmental 457(b) makes more sense than Roth contributions if our goal is to retire around age 50.”source ↗
“Should I pause contributing to my 403b or reduce the monthly amount to build up a general investment portfolio and/or more cash savings?”source ↗
“That feels scary, but the numbers seem to show me that I will be ok in retirement.”source ↗
“I guess my main question is, if you were in our situation, how would you allocate the money? Would you focus on getting rid of the cars first, maxing out retirement accounts, saving more for a house, investing in a brokerage account, or some combination of everything?”source ↗
“Is there any benefit to putting money in my Roth 401k instead of the Robinhood Roth IRA?”source ↗
“What percentage should I contribute? 3%? (I’m new in the states)”source ↗
Where this came up
People with this problem also raised
- 4How to handle 401(k) contributions and employer matches when changing jobs
- 5How to hit max 401k contribution with whole percentage limits
- 32What funds and allocations should I pick for a new Roth IRA?
- 19Should I lower my retirement contributions to save for a house?
- 6Should I lower my 401k to pay off a mortgage faster?
- 4How do 401(k)s and retirement accounts actually work?