Maxed Out Your IRA? Here's What to Do Next.

A lot of people struggle to save for their post-working years. Recent Motley Fool research found that only 39% of Americans ages 18 to 29, for example, have retirement savings.

But if you earn a higher salary, have modest needs, or are good with money, you may be in a position where you're not only funding an individual retirement account (IRA) on a regular basis but maxing it out. And if you're able to save beyond the maximum limits (which, this year, are $7,500 for workers under 50 and $8,600 for those 50 and over), it's important to put your extra money to good use. Here are some options to look at.

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1. Fund an HSA

If you're enrolled in a high-deductible health insurance plan, you may be eligible to contribute to a health savings account, or HSA. HSA contributions go in on a pre-tax basis, allowing you to shield some income from taxes.

Plus, HSAs don't require you to use up your balance every year as flexible spending accounts do. In fact, they encourage you to carry a balance, since you can invest unused funds and enjoy tax-free gains. HSA withdrawals are also tax-free when used for qualifying medical expenses.

Since healthcare costs tend to rise in retirement, it's a good idea to fund an HSA once you've maxed out your IRA and reserve that account for your senior years. You should also know that while non-medical HSA withdrawals are subject to penalties, that restriction goes away once you turn 65.

At that point, an HSA can function like a traditional IRA or 401(k) plan. Non-medical withdrawals are subject to taxes, but there are no penalties to worry about.

2. Invest in a taxable brokerage account

If you're unable to fund an HSA or have already maxed one out on top of an IRA, it's worth investing for retirement in a taxable brokerage account. Clearly, your money won't go in tax-free, and you'll face capital gains taxes every year. But if you sell your assets strategically, you can minimize your capital gains tax bill.

A taxable brokerage account also gives you more freedom to use your long-term savings. With an IRA, you'll generally face a 10% early withdrawal penalty for accessing your money before age 59 and 1/2. A taxable brokerage account is a nice thing to have if you're a strong saver who may end up in a position to retire early.

If you have money left over to save after maxing out an IRA, that's a good problem to have. Look to an HSA and/or taxable brokerage account in that situation. Combining a few different accounts earmarked for retirement could end up giving you more flexibility in the long run.

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