3 Places to Save After Maxing Out Your 401(k)

Contributing to your employer’s 401(k) plan is generally seen as a wise financial move to help you prepare for retirement. However, it’s not your only avenue for building a healthy retirement nest egg. If you’ve hit the annual contribution limit by maxing out your 401(k), there are a few other accounts you can consider if you’re looking for places to park some extra cash for your golden years. If you have questions about building a robust retirement plan for your future, consider speaking with a financial advisor.

What It Means to ‘Max Out’ Your 401(k)

The IRS sets annual contribution limits on 401(k) plans to regulate their substantial tax benefits. Despite these restrictions, a 401(k) offers significant growth potential through a combination of investing, tax deferral and compound interest. To keep pace with inflation, the IRS frequently adjusts these limits, ensuring retirement savers can continue maximizing their contributions over time.

For 2025, 401(k) account holders can contribute up to $23,500 to their account (up from $23,000 in 2024). If you’re at least 50 years old, the IRS will allow you to make extra contributions. These are referred to as “catch-up” contributions. For 2025 (and 2024), the IRS is allowing $7,500 in catch-up contributions. Starting in 2025, these contributions will increase to $11,250 for those between the ages of 60 and 63. These enhanced contributions are known as “super catch-up contributions.”

Once you reach these limits on your 401(k), you’ve “maxed it out” for the current tax year. This is when you can begin to look elsewhere for other places to save for retirement. Below are three integral accounts you can use after maxing out your 401(k) to further your savings goals.

Should I Max Out My 401(k)?

Maxing out a 401(k) can be a strategic way to build long-term wealth while benefiting from tax advantages. Contributions reduce taxable income in the current year, and investments grow tax-deferred until withdrawal in retirement.

However, whether to max out depends on factors like employer matching, expected retirement income, and other financial priorities. Those with high-interest debt or insufficient emergency savings might benefit from addressing those first before committing the maximum contribution.

For example, someone who consistently maxes out their 401(k) at $23,500 per year, assuming a 7% average annual return, could accumulate approximately $2.3 million in 30 years. If they increase their contributions as limits rise and take advantage of catch-up contributions, the total could be even higher. This long-term growth potential highlights the benefit of consistently prioritizing retirement savings. Even if market fluctuations occur along the way, the power of compounding can significantly amplify contributions over time.

3 Places to Save After Maxing Out Your 401(k)

Once you’ve maxed out your 401(k) for the year, you may have more money that you want to save for retirement. Other retirement accounts could be beneficial to use along with your 401(k) account if you’re looking to save even more. Additionally, there are also financially beneficial accounts that let you put money into them pre-tax to pay for specific expenses, like healthcare. Here are three of our favorite places to save once you’ve maxed out your 401(k) for the year.

1. Individual Retirement Account (IRA)

IRAs can be a great tool to supplement your 401(k) contributions, and you can enjoy some tax benefits in the process. With a traditional IRA, you get the benefit of a tax deduction on the contributions you make and you don’t pay any taxes on the money until you start making qualified withdrawals in retirement.

A Roth IRA isn’t deductible, but that can work to your advantage if you expect your income to go up over time. Withdrawals of Roth IRA contributions are always tax-free along with any earnings you take out beginning at age 59 ½. Since you’ll be paying taxes on your 401(k) withdrawals, a Roth IRA can supplement your income in retirement without increasing what you owe to Uncle Sam.

Whether you can open a Roth IRA or deduct your traditional IRA contributions depends on your income and filing status. For 2025, the full IRA deduction is available to single filers who also have a 401(k) as long as they earn $79,000 or less per year. The income cap increases to $126,000 for married couples filing jointly. In addition, if you’re single and earn $165,000 or more, or you’re married, file jointly and with your spouse earn $246,000 or more, you can’t contribute to a Roth IRA in tax year 2025.

2. Health Savings Account (HSA)

Health savings accounts (HSAs) are designed to help you save for medical care, but they can also be a source of retirement income. The money you contribute is tax-deductible and distributions that are used for qualified health care expenses can be tax-free. Some employers may even offer to match a certain percentage of your contributions.

You can use money in your HSA for any purpose other than healthcare. However, you’ll pay taxes on the withdrawal, along with a 20% penalty if you withdraw before age 65.

Health savings accounts are only available if you’re enrolled in a high-deductible insurance plan. For 2025, the contribution limit for someone with individual coverage is set at $4,300; it goes up to $8,550 if you have family coverage. For 2024, these were $4,150 and $8,300 respectively.

3. Taxable Investment Account

With a 401(k), HSA or IRA, you’ll get some tax benefits if you’re able to deduct what you put in, defer taxes on earnings or avoid them altogether. But it can still be a good idea to have a taxable brokerage account for investing. While your earnings may be subject to capital gains tax, that’s easily overshadowed by the other advantages a taxable account offers.

For one thing, you’re not restricted by annual contribution limits. Tax-advantaged accounts cap what you can put in each year, but the sky’s the limit with an investment account. You also don’t have to worry about taking required minimum distributions (RMDs) if you reach age 73 in 2025 (75 in 2033), which is a condition of having a 401(k) or traditional IRA.

What’s more, you’re not barred from saving by your income. Compared to a 401(k) or similar account, you’ll have a much wider range of investments to choose from.

Bottom Line

Don’t think that you have to stop saving once you hit your 401(k) limit for the year. Stopping contributions at the 401(k) limit could slow down your long-term savings growth. There are plenty of other opportunities for building wealth over the long term. Diversifying your asset allocations can be beneficial. That’s because each of these various accounts provides its unique benefits. By strategically utilizing each type of account, you can optimize your savings and tax benefits.

Retirement Planning Tips

Planning for retirement can be a daunting venture. Consider getting some help from a financial advisor if you have specific questions. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Social Security can be an integral part of your long-term income plan for retirement. Try SmartAsset’s Social Security calculator to get an idea of what you’ll receive.