Extra Cash? What to Do After You've Maxed Out Your Retirement Accounts.
Key Points
HSAs offer many of the same tax benefits as traditional IRAs, plus tax-free medical withdrawals at any age.
You can only contribute to an HSA if you have a high-deductible health insurance plan.
Taxable brokerage accounts have fewer tax advantages, but they also have fewer restrictions than retirement accounts.
- The $23,760 Social Security bonus most retirees completely overlook ›
If you've already maxed out your retirement account contributions for the year, take a moment to congratulate yourself. That's a big accomplishment, and it'll have a significant effect on your lifestyle in retirement. But you may want to do more.
Fortunately, there are other ways to set money aside for the future if you have more cash to spare. Here are two worth considering.
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Save in a health savings account (HSA)
Health savings accounts (HSAs) are designed to hold medical expenses, but they can also serve as retirement accounts. They're similar to traditional IRAs in that your contributions reduce your taxable income for the year and your earnings grow tax-deferred. Nonmedical withdrawals are taxable and carry a 20% penalty if you're under 65, but medical withdrawals are tax-free at any age.
You can only contribute to one of these accounts if you have a high-deductible health insurance plan. These are plans with a deductible of $1,700 or more for individuals or $3,400 or more for families in 2026.
This year, those with qualifying individual plans can save up to $4,400 in one of these accounts, while those with qualifying family plans can save up to $8,750. Those 55 and older can add another $1,000 to these limits.
If you hope to use your HSA for retirement savings, you should avoid taking early medical withdrawals whenever possible. Save for medical expenses in a separate high-yield savings account, if you can.
You'll also want to invest your HSA funds. This will help your savings grow more quickly so your money will go further in retirement.
Invest in a taxable brokerage account
If an HSA isn't an option for you or you've already maxed yours out for the year, you can save more money in a taxable brokerage account. These accounts don't have the same tax benefits as retirement accounts or HSAs, but they also have fewer rules. You can invest as much as you want in anything you want, and you're free to take withdrawals whenever you like
However, if you're trying to keep your taxes to a minimum, it's worth holding on to your investments for at least one year before selling them. Then, you'll pay long-term capital gains tax rates on your earnings, rather than the higher short-term capital gains tax rates.
Keep in mind that retirement account contribution limits tend to go up over time, and you become eligible for catch-up contributions in the year you turn 50. So if you prefer to save in retirement accounts, you may be able to stash more money here in 2027 and beyond.
The $23,760 Social Security bonus most retirees completely overlook
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