Definition
Any account with special tax treatment: 401(k)s, IRAs, HSAs, and 529s. Using them in the right order is worth six figures over a career versus investing the same money in a taxable account.
Why it matters
The tax code pays people to save in the right wrappers, and most leave part of that payment unclaimed. Filling these accounts in the right order is the highest-yield paperwork in personal finance.
Example
A saver routes money in order: 401(k) to the match, then HSA, then Roth IRA, then back to the 401(k) max, and only then a taxable brokerage. The same dollars in the wrong order would surrender decades of tax-free compounding.
Put it into practice
Related terms
This definition is educational, not financial, legal, or tax advice. U.S. rules and limits change; verify time-sensitive details with official sources. See our disclaimer.