Lesson 5.3: Retirement & Tax-Advantaged Accounts

Key ideas from the lesson

• Every tax-advantaged account is a deal: a tax break in exchange for rules. So the first question is always: what's the money for?
• Step one: get the full employer match. It's an instant 100% return on the money you put in — turning it down is turning down part of your pay.
• Step two: pick Roth or traditional by tax timing. If your rate is low now — like most teens and young workers — the Roth's “pay tax now, never again” is usually the better deal. In a high-earning year, a traditional IRA's deduction now can be worth more.
• Step three: use purpose accounts for their purpose — a 529 for education, an HSA for health costs. Step four: a brokerage account for everything else — flexible, but no perks.
• IRAs have a yearly limit: for 2026 it's $7,500, or your earned income for the year if that's less. You need earned income to contribute; under 18, a parent or guardian opens a custodial IRA and the money comes from your own paycheck.

Why this helps

Account Match is a sorting game where every card is an IRS rule wearing a nickname. These two IRS pages are the rulebook: the current contribution limit in the source's own numbers, and the IRS's side-by-side of the Roth-vs.-traditional choice the lesson asks you to make by tax timing.