New on FinoLib · Volume V: Personal Finance
New on FinoLib, my finance education website: I have published an article called 401(k) vs IRA vs HSA: Employer Match and Retirement Accounts, from Volume V: Personal Finance. It is part 1 of a 2-part guide. Here is what the article explains, written as a short expert briefing; the full piece, with every worked example, is one click away.
The idea in plain words
Your job pays you in more ways than your salary. If your employer matches your retirement contributions, that match is free money, so contribute at least enough to collect all of it. Once costly debt is gone and your emergency fund is full, put money into a health savings account if your plan allows one. After that, choose between traditional and Roth accounts by comparing the tax rate you save now with the rate you expect to pay later. Count benefits as pay, because a lower salary can be the better offer.
Key points
■For 2026: $24,500 into a 401(k) or 403(b), $7,500 into an IRA, and $4,400 self-only or $8,750 family into an HSA.
■The $24,500 is per person across every 401(k) and 403(b) in a year; a governmental 457(b) has its own limit.
■Matches exist partly to help plans pass tax tests, and the formula, not the headline percentage, sets the rate you need.
■HSA money contributed through payroll also skips the 7.65% FICA tax, which no 401(k) deferral does.
A closer look
A job pays total compensation: salary plus what the employer spends on you outside the paycheck. Several benefits escape income tax, so a dollar of benefit can beat a dollar of salary:
ESPPs. An employee stock purchase plan under Section 423 sells you shares through payroll at no less than 85% of market value; with a lookback, at 85% of the lower of the price when the offering period starts or on the purchase date. The 15% discount alone is an immediate 15 ÷ 85 = 17.6% gain. At $40 when the offering starts and $50 at purchase, $6,000 buys at 85% × $40 = $34: 176.47 shares worth $8,823.53, a 47% gain. Purchases are capped at $25,000 of stock a year, valued at the start price.
RSUs. Restricted stock units become shares as they vest, and their value that day is taxed as wages, sold or not. Employers usually withhold at the flat 22% supplemental-wage rate (37% above $1 million a year), too little in the 24% bracket: 100 shares vesting at $60 are $6,000 of income, $1,320 withheld against $1,440 owed. Keeping them is the same as using a $6,000 bonus to buy your employer’s stock, tying income and savings to one company (7.7).
Student-loan help. Under Section 127 an employer can pay up to $5,250 a year of tuition or student-loan payments tax-free — one combined cap. The loan part was due to expire after 2025; the One Big Beautiful Bill Act made it permanent and indexes the $5,250 to inflation after 2026.
All three are employer-sponsored retirement accounts governed by the same core mechanics — contributions deducted directly from payroll, invested in a menu the employer selects, growing tax-advantaged until withdrawal — differing mainly in which employer offers them:
A worked example
Worked Example — Where the Running Household’s Next $3,000 Lands
The example above assumes every dollar sits in the 22% bracket. The running household’s dollars do not. Part 1.6 put its 2026 taxable income at $51,800, and the single filer’s 22% bracket starts at $50,400 — so only its top $1,400 is taxed at 22%; the income below that is taxed at 12%. Suppose it raises its traditional 401(k) contribution by $3,000 a year, from 6% to 10% of salary. The tax saving is $1,400 × 22% + $1,600 × 12% = $308 + $192 = $500 — a blended 16.7% ($500 ÷ $3,000), not 22%. The take-home cost is $3,000 − $500 = $2,500 (FICA still applies to 401(k) deferrals).
Money Move
Five questions for the first benefits meeting: What contribution rate collects the full match (6.5)? How does the match vest (6.7: Vesting, Rollovers, and What Happens When You Change Jobs)? What does each health plan cost per paycheck, and is there an HSA deposit (6.6, 8.2)? What life and disability coverage is included, and can I pay the disability premium after tax (8.4)? Is there an ESPP, education or commuter benefit, and when do elections close?
Why It Matters
For 2026, the employee elective-deferral limit across a 401(k) or 403(b) is $24,500, with a further $8,000 catch-up for those 50 and older, or an enhanced $11,250 “super catch-up” specifically for ages 60–63. The combined limit including employer contributions is far higher — $72,000 — which is exactly the room the “mega backdoor Roth” in 6.4 depends on.
What the full article covers
The full article includes worked examples, a recap, a reveal-on-click quiz and the official sources behind every figure.
Volume V: Personal Finance
Read the full article on FinoLib
The complete article, 401(k) vs IRA vs HSA: Employer Match and Retirement Accounts, with every worked example, diagram, quiz and source, is free to read in Volume V, Personal Finance on finolib.com.
Explore the Finance Education Series: Vol. II — Capital Markets · Vol. I — Global Economy · Vol. III — Finance Encyclopedia · Vol. IV — Finance Careers · Vol. V — Personal Finance