Welcome back - today's topic is the question that trips up almost everyone the first time they have actual money to invest: which account do I even open first?
Three accounts, three different jobs
Before ranking them, it helps to know what each one actually does.
A 401(k) is a retirement account offered through an employer. Money often comes out of your paycheck automatically, before you ever see it, and many employers match a portion of what you contribute. For 2026, the contribution limit is $24,500.
A Roth IRA is a retirement account you open yourself, funded with money you've already paid taxes on, which means it grows completely tax-free, and withdrawals in retirement are tax-free too. For 2026, the contribution limit is $7,500.
A brokerage account is just a regular investment account - no special tax treatment, no retirement restrictions, but also no penalties for touching the money whenever you want.
The order that wastes the least opportunity
First: your 401(k), up to the match. If your employer offers to match your contribution, even partially, that's money that simply doesn't exist unless you contribute enough to claim it. Not doing this is the closest thing to leaving free money on the table that exists in personal finance. Contribute at least enough to get the full match before touching anything else.
Second: a Roth IRA. Once the match is secured, a Roth IRA usually comes next for a simple reason: at this stage of life, you're likely in a lower tax bracket than you'll be later in your career. Paying taxes now, while your income is lower, and letting decades of growth happen completely tax-free, tends to work out better than the alternative.
Third: a brokerage account. No tax perks, but also no restrictions. This is where money goes once you've captured the match and funded your Roth, useful for goals that come before retirement - a car, a home down payment, or just general flexible investing.
Why this order, specifically
Each step in this order is about not leaving value behind. Skipping the employer match to prioritize a Roth IRA means walking past free money to get to a good deal instead. Skipping the Roth to load up a brokerage account first means giving up decades of tax-free growth for money that offers no such advantage. The order isn't a rule about which account is "best" - it's about which one wastes the least opportunity if done out of sequence.
What this actually looks like in practice
You don't need to fully max out one account before starting the next. If your budget only allows a little right now, split it: get the match first with whatever your employer requires, then send anything left toward a Roth IRA, even a small, consistent amount. The brokerage account can wait until the first two are genuinely in motion.
Plug in your own numbers below and see exactly how a given monthly amount gets allocated in this order.
Illustrative allocation only, assuming a dollar-for-dollar employer match up to the amount entered. Your actual plan's match formula, vesting schedule, and investment options will vary - check your plan documents.
The thread that connects it all
None of these accounts do much good sitting empty, and none of them require a lot of money to start meaningfully. What matters is the order: match, then Roth, then brokerage, so nothing valuable gets left on the table along the way.
Sources & further reading
