🧾 Max the Tax Code
In your peak earning years, taxes are your biggest lifetime expense — bigger than housing. Every dollar you shield from taxes is a dollar that compounds for decades. Tax planning in your 30s is worth more than stock picking.
Questions this step answers
Why this matters
Most people spend hours researching investments to squeeze out an extra 0.5% of return — and zero minutes on tax strategy that could save them 20–30% on every dollar invested. The tax code hands you legal shelters; this step is about using all of them, in the right order.
The framework
Fill from the top. Each tier is a kind of tax treatment, not a brand of account.
Crown — taxed never, if you follow the rules
The HSA — only with a qualifying high-deductible plan. Deductible in, tax-free growth, tax-free out for medical costs. At 65 it can be used like a traditional IRA. The only triple-tax account, and it isn't available to everyone. How the HSA works →
Middle — taxed once
Roth IRA, Roth 401(k), and the 529. Money goes in after tax; qualified withdrawals come out tax-free. A direct Roth IRA has an income limit (2026: phases out at $153k–$168k single). A 529 belongs here, not in a family sidebar — it's the same "taxed once" idea, aimed at education instead of retirement, and it's for qualified education expenses, not a retirement account. Roth IRA guide → 529 guide →
Base — taxed later
Traditional 401(k) and traditional IRA. Deduction now, tax on the way out. This is where the rate comparison lives: if today's marginal rate is higher than the rate you expect in retirement, fill this tier before extra Roth. Traditional 401(k) guide →
What doesn't fit a tier: the taxable brokerage — for after the tax-advantaged buckets are full — and the mega backdoor Roth, a plan feature that moves extra after-tax 401(k) dollars into the middle tier. Most readers can't use it, so it stays out of the pyramid. The two backdoor tricks →
The pyramid explains why. The waterfall says when.
The fill order you learned on Step 1 — unchanged. Fund each step only after the previous one is full.
Backdoor & mega backdoor Roth
Two tricks for getting money into Roth when the front door is locked — now split apart on their own page. The regular backdoor: nondeductible traditional IRA, convert, watch the pro-rata rule. The mega backdoor: after-tax 401(k) plus in-plan or in-service Roth rollover, if your plan allows it. Explore the tricks →
What is an HSA and should I actually use one?
The crown of the pyramid deserves its own page: the triple tax benefit, the receipt strategy that turns medical bills into tax-free retirement withdrawals, the age-65 switch — and the honest case where a traditional plan beats the HDHP. How the HSA works →
Do this this week
- Confirm HSA eligibility and max it before Roth IRA
- Split 401(k) contributions Roth vs. pre-tax using the rule above
- Ask HR if your plan allows mega backdoor Roth
- Harvest any taxable-account losses before year-end
⚠️ Common mistakes
- Ignoring the HSA because "it's just for medical bills."
- Going 100% Roth at a 32%+ marginal rate.
- Leaving an old HSA in cash instead of investing it.
Step 4 is the fill order. The retirement lab is the spend-down: traditional balances become RMDs, Roth balances are the tax-free sleeve, HSA receipts are a medical bridge before Medicare.