Most individuals consider retirement planning as a selection between a 401(okay) and an IRA after which name it a day. However what in the event you’re leaving 1000’s of {dollars} on the desk since you didn’t know there have been extra choices? The reality is that the U.S. tax code and retirement system supply a number of accounts with little-known benefits. But most People both ignore them or by no means discover ways to use them to their full potential.
That’s not totally your fault. These perks are not often taught in class, HR usually glosses over them, and monetary advisors don’t at all times point out the extra nuanced instruments until you ask. However these missed accounts can present severe tax benefits, versatile withdrawal choices, and long-term safety which may change your complete retirement trajectory.
Listed below are 7 retirement accounts with perks most individuals don’t benefit from—plus the best way to make them be just right for you.
1. Well being Financial savings Accounts (HSAs): A Triple Tax Win
Most individuals consider an HSA as only a strategy to pay for prescriptions or physician visits. But when used strategically, an HSA might be one of the crucial highly effective retirement automobiles accessible, particularly in the event you depart the cash untouched till retirement.
Right here’s why: Contributions are tax-deductible, the cash grows tax-free, and withdrawals for certified medical bills are additionally tax-free. That’s a triple tax benefit you received’t discover in some other account. When you hit age 65, you may even withdraw funds for non-medical bills with out penalty (although you’ll owe earnings tax, like a standard IRA). That makes your HSA a hybrid of a retirement account and a healthcare security web.
For those who’re enrolled in a high-deductible well being plan (HDHP), maximizing your HSA contributions annually can present long-term advantages that reach effectively past your present physician’s payments.
2. Solo 401(okay): A Enterprise Proprietor’s Secret Weapon
For those who freelance, seek the advice of, or run a facet hustle, you could qualify for a Solo 401(okay). Most individuals assume this account is just for full-time entrepreneurs, however anybody who earns self-employment earnings, even part-time, can use it.
The perk? You may contribute as each the worker and the employer. This lets you stash away considerably greater than in a regular 401(okay) or IRA. In 2025, that’s as much as $69,000 yearly in the event you’re below 50 or $76,500 in the event you’re 50 or older (together with catch-up contributions).
Solo 401(okay)s additionally permit Roth contributions and will supply mortgage choices. If in case you have a profitable facet gig, this account can speed up your retirement financial savings quicker than you’d anticipate.
3. Roth 401(okay): Tax-Free Development with Increased Limits
Whereas Roth IRAs get lots of consideration, Roth 401(okay)s are sometimes missed although they permit for a lot greater contribution limits.
With a Roth 401(okay), you contribute after-tax {dollars} (similar to a Roth IRA), however you get the good thing about the 401(okay)’s annual contribution restrict—$23,000 in 2025 in the event you’re below 50 and $30,500 in the event you’re 50 or older. This lets you lock in tax-free development and tax-free withdrawals afterward with out the earnings restrictions that apply to Roth IRAs.
Many employers now supply this selection, however few workers use it. For those who consider your tax charge might be greater in retirement or simply need extra flexibility afterward, the Roth 401(okay) deserves a re-assessment.
4. 457(b) Plans: The Early Withdrawal Loophole
For those who work for a state or native authorities or sure nonprofits, you could have entry to a 457(b) plan. Whereas it seems like an everyday 401(okay), it comes with a novel perk: you may withdraw the funds penalty-free earlier than age 59½.
That’s an enormous benefit in the event you plan to retire early or wish to bridge the hole between quitting work and accessing Social Safety. In contrast to 401(okay)s or IRAs, there’s no early withdrawal penalty. Simply common earnings tax.
Many public workers don’t take full benefit of this plan or don’t notice they’ll contribute to each a 403(b) and a 457(b) concurrently, successfully doubling their retirement financial savings potential.
5. SEP IRA: Easy, However Overpowered
For freelancers and small enterprise homeowners with out full-time workers, the SEP IRA presents a easy setup with main advantages. Contributions are tax-deductible, and the annual limits are beneficiant (as much as 25% of your web earnings, with a most of $69,000 in 2025).
It’s simpler to arrange than a Solo 401(okay), requires much less paperwork, and is usually a good possibility for facet hustlers or part-time entrepreneurs. However right here’s the important thing: most individuals by no means assume to open one simply because their enterprise earnings isn’t enormous.
Even when your freelance earnings is just a few thousand {dollars} per 12 months, placing it right into a SEP IRA might scale back your taxable earnings and develop tax-deferred. Over time, that small benefit can flip into a giant retirement increase.
6. Spousal IRA: Retirement Financial savings for a Non-Working Companion
Many {couples} overlook the truth that a non-working or low-income partner can nonetheless contribute to an IRA so long as the opposite associate has earned earnings.
Often called a Spousal IRA, this account might be both Roth or conventional and permits a pair to successfully double their IRA contributions. In 2025, that’s as much as $7,000 per partner (or $8,000 every if over 50), even when one associate doesn’t earn any earnings.
That is particularly precious for {couples} the place one mother or father stays residence with youngsters or works part-time. It retains retirement financial savings rising for each companions and helps stop monetary imbalance down the street.
7. After-Tax 401(okay) Contributions: Mega Backdoor Roth Potential
This is among the most underutilized retirement strikes, partly as a result of it sounds sophisticated. But when your employer permits after-tax contributions to your 401(okay) plan, you may have the ability to contribute excess of the usual limits after which roll that cash right into a Roth IRA.
It’s referred to as the Mega Backdoor Roth, and whereas it takes some paperwork and understanding of your plan’s guidelines, it could possibly permit excessive earners to stash away as much as $46,000 extra per 12 months right into a tax-advantaged account.
Most individuals don’t even know that is doable. However for many who do, it’s one of many quickest methods to turbocharge tax-free retirement financial savings, particularly in the event you’ve already maxed out conventional and Roth choices.
Don’t Let Good Accounts Go to Waste
The usual recommendation of “get the 401(okay) match and open an IRA” is simply the tip of the iceberg. If you wish to retire with extra freedom, flexibility, and monetary energy, it is advisable to go deeper. These seven accounts supply lesser-known perks that would offer you an edge most individuals by no means faucet into.
The excellent news? Most of those choices aren’t restricted to the rich. With the best information, even modest earners can benefit from them and probably retire with much more than they thought doable.
Which of those accounts stunned you most, and which one will you look into subsequent?
Learn Extra:
11 Retirement Planning Hacks That Sound Unlawful (However Aren’t)
The best way to Save for Retirement With out Giving Up Your Life
Riley is an Arizona native with over 9 years of writing expertise. From private finance to journey to digital advertising and marketing to popular culture, she’s written about the whole lot below the solar. When she’s not writing, she’s spending her time exterior, studying, or cuddling together with her two corgis.
