Saving for retirement: choosing among workplace, IRA and other accounts

Along with making the decision to save for retirement, you must also consider your retirement savings account options. You may be able to save through a workplace retirement plan, on your own in an IRA or in another type of account. Here’s an overview of some of the most common options.

Workplace retirement accounts

Most large employers offer a 401(k) retirement plan. A traditional 401(k) provides an up-front tax break, and your investments grow tax deferred. You’ll pay taxes on withdrawals in retirement.

Many employers also offer a matching contribution, up to a set percentage of your pay. For example, an employer might match 50% of your contributions up to 6% of your salary. If possible, aim to contribute at least enough to receive the full employer match — it’s essentially free money.

Some employers offer Roth 401(k) accounts. These also allow tax-free growth, but contributions are made with after-tax dollars. While you don’t get an immediate tax benefit, qualified withdrawals after age 59½ are tax free.

Government and nonprofit employers commonly offer 403(b) accounts. They work much like 401(k) plans and can also allow employees to invest through tax-deferred annuities.

Both 401(k) and 403(b) plans typically offer a range of mutual funds that invest in stocks, bonds and other assets. One popular option is a target date fund, which automatically adjusts its investment mix over time based on your expected retirement year. For example, someone planning to retire in about 30 years might choose a 2055 target date fund.

In 2026, you can contribute up to $24,500 to a traditional or Roth 401(k) or 403(b). Savers age 50 and older may contribute an additional $8,000 in catch-up contributions.

Individual retirement accounts        

Individual retirement accounts, or IRAs, let you save for retirement outside of a workplace plan. As with a 401(k), you can save into a traditional IRA for an immediate tax deduction or a Roth IRA for tax-free withdrawals in retirement.

In 2026, you can contribute up to $7,500 a year to either a traditional or Roth IRA. Note that your ability to contribute to IRAs may be limited if you have access to a retirement plan at work or your income exceeds certain limits.

Savers 50 and over can contribute an additional $1,100 a year into an IRA.

Health savings accounts

You can save for healthcare costs in retirement though a health savings account (HSA), which many employers offer as part of their benefits package. You are eligible to open an HSA if you are covered by a high-deductible health plan. In 2026, plans with a minimum deductible of $1,700 for individuals and $3,400 for families qualify.

HSAs offer a triple tax advantage: Contributions made through payroll are pretax, and contributions made outside of payroll may be deductible. Investment earnings on your account are tax deferred, and account withdrawals are tax free if used to cover qualified medical expenses. In retirement, you can withdraw HSA money for any expenses, though nonmedical withdrawals are taxed. Note, though, that choosing a high-deductible plan means you will need to cover a significant amount of your medical expenses before your insurance kicks in.

Unlike a healthcare flexible spending account, an HSA does not require you to forfeit a balance remaining in your account at year-end.

Choosing where to save for retirement

The right mix of retirement savings accounts depends on your circumstances. In general, if your employer offers a match, contribute enough to take full advantage of it. After that, if you have contributed the maximum amount to your workplace plan, you might consider contributing to an IRA, which often provides a wider range of investment choices and additional tax-advantaged savings.

High earners who max out workplace plans and IRAs may want to save additional money in a taxable brokerage account. While investment gains are taxable, these accounts offer more flexibility, including access to funds before retirement if needed.

Get professional guidance

For more help exploring retirement savings options, contact your EY Navigate™ financial planner. Your planner can help you choose a mix of accounts that matches your ability to save and future goals.