The top 3 places to put your retirement savings for the rest of 2024

There are only three months left in 2024, so now is the perfect time to start thinking about making some retirement contributions before you get caught up in the holiday shopping season. If you’ve already put money aside this year, that’s great. If not, you can still make a substantial contribution to your future in the next few weeks.

If you want those dollars to be worth as much as possible when you retire, you need to think carefully about where you put them. Here are the top three places to put your retirement savings in the final months of 2024.

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1. 401(k)

A 401(k) should be the first place you put retirement savings each year if your plan offers a company match. This match could be worth a few thousand dollars today and may be worth tens of thousands of dollars by the time it is retired. But you have to make contributions to your account before your employer gives up anything.

Check with your HR department if you’re not sure how much you need to contribute to get the full match. Then divide this by the number of pay periods left in the year to find how much you need to put aside per check. If you can’t claim everything, that’s okay. Just get as much as you can. You can only make 401(k) contributions for 2024 until December 31st, so the sooner you start, the better.

If your 401(k) doesn’t have a company match, it could still be a good choice for your savings. Once you’ve set up salary deferrals, you don’t have to remember to put money away. Plus, it offers high contribution limits — $23,000 for adults under 50 in 2024 and $30,500 for adults 50 and older. But it doesn’t hurt to compare them with the other options listed below to decide if it’s the right place for your money.

2. IRA

IRAs are a great alternative to a 401(k) if you don’t have access to one. You can also open them with many brokers and some banks. It gives you the freedom to invest your money however you want, and you also have a say in when you pay taxes on your funds. Traditional 401(k)s give you an upfront tax break when you make contributions, but you pay taxes on your withdrawals Roth IRAs require you to pay taxes on your contributions in the year you make them in exchange for tax-free withdrawals in retirement.

In general, traditional IRAs make sense if you think you’ll be in a lower tax bracket in retirement than you are today. It may also be your only option if your income is too high to contribute directly to a Roth IRA. If none of these things apply to you, a Roth IRA might make more sense.

The biggest downside to IRAs is that you’re limited to just $7,000 in contributions in 2024, or $8,000 if you’re 50 or older. This is the limit for all of your IRAs, not for each individual account. Some people may have already reached this limit for 2024. In that case, you’ll need to try one of the other accounts listed here.

3. Health Savings Account (HSA)

Health savings accounts (HSAs) may also be a possibility if you have a high-deductible health insurance plan. This is defined as one that charges a deductible of at least $1,600 in 2024 for an individual plan or $3,200 for a family plan. You can open one of these accounts at many banks and some brokers. Whenever possible, opt for a provider that allows you to invest your HSA funds.

HSA contributions reduce your taxable income for the year, just like traditional IRA contributions. But you also get tax-free medical withdrawals at any age. You can also make non-medical withdrawals. But these are taxable and you’ll also pay a 20% penalty if you’re under 65 at the time. For this reason, it’s best to avoid non-medical withdrawals and ideally avoid withdrawals for current medical expenses if you plan to use the account for retirement savings.

Those with eligible health insurance plans can contribute up to $4,150 in 2024, while those with eligible family plans can contribute up to $8,300. Adults 55 and older can add another $1,000 to these limits.

You can also spread your money across multiple of these accounts if you have access to them. If neither of these is an option, consider placing your funds in a taxable brokerage account. This won’t give you the same tax breaks, but you can still invest the funds to grow your wealth. Alternatively, you can keep your funds and start preparing to make contributions for 2025.