The Best Accounts You Should Consider Heading into 2025

Hi, I'm Tyler. I'm a former financial advisor and portfolio manager, and now I make financial content for free to help you navigate your financial journey without the cost.

1. Health Savings Account (HSA)

The first account I recommend considering is a Health Savings Account (HSA). You might not be eligible for one, but if you are and you have a high deductible health plan, it is the only triple tax-advantaged account in the world. Here’s how it works:

Contributions are tax-deductible.
Contributions can be invested and grow tax-free.
All withdrawals are tax-free, as long as they are spent on qualifying medical expenses.

If health isn’t your primary concern, don’t worry! At age 65, you can use those funds however you wish; you just have to pay taxes on the income.

2. Traditional 401(k) or IRA

The second option is a traditional 401(k) or IRA. You might have thought I’d mention a Roth account, but if you're in your 40s or 50s and at or near the height of your earning power, you’re probably in a relatively high tax bracket. It may be more beneficial to defer those taxes until retirement, when you are likely to be in a lower tax bracket than now.

The Roth is cool, but it might be more appropriate for 2024.

3. Taxable Brokerage Account

Lastly, consider a taxable brokerage account. This account allows you to invest your money with complete access before age 59 and a half. Personally, I invested in a couple of low-cost growth funds back in my 20s, and now I can withdraw about $5,000 to $10,000 annually from that account in the form of capital gains. This income is taxed at a much lower rate than if it were ordinary income.

You can also put your ordinary income into a SEP IRA for additional retirement savings.

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