Most Americans treat their 401(k) as a one-stop retirement plan, contribute what they can, and assume the job is done. That approach leaves thousands of dollars in potential tax savings unclaimed every year in accounts Congress designed specifically to complement employer-sponsored plans.
The U.S. population is aging at an unprecedented pace. The share of Americans 65 and older rose from 12.4% in 2004 to 18.0% in 2024, according to U.S. Census Bureau data cited by Pew Research, and many entered retirement with savings concentrated entirely in a single account type.
The good news is that three widely available accounts offer distinct advantages your 401(k) simply cannot match.
Certificates of deposit offer guaranteed returns with low risk
A certificate of deposit (CD) is a savings product offered by banks and credit unions that locks your money in for a set period in exchange for a fixed interest rate.
As of May 2026, savers willing to compare options across institutions can find CDs paying more than 4%, making them among the simplest low-risk tools for building retirement savings outside a brokerage account, USA TODAY reported.
Key features that make CDs attractive for retirement savers
- CDs provide a fixed interest rate and guaranteed returns, so you know exactly what your money will earn before you commit to the term.
- Deposits are insured by the FDIC or NCUA for up to $250,000 per depositor at each institution, eliminating the risk of losing your principal.
- Terms range from three months to 10 years, and you decide how long to lock your money in based on your specific timeline and needs.
- Building a “CD ladder” by opening multiple CDs with staggered maturity dates gives you regular access to funds while still earning competitive rates.
- Most CDs carry no maintenance fees, and interest may compound daily, monthly, or quarterly, all of which increase your overall return over time.
A traditional IRA gives you tax-deferred growth
For workers who lack a 401(k) or want to diversify beyond employer-sponsored plans, the traditional IRA is one of the most flexible retirement accounts available. It allows you to invest whether you are self-employed, work for a small business, or simply want a second tax-advantaged account alongside your workplace plan, according to Fidelity Investments.
Contributions to a traditional IRA may be tax-deductible, which reduces your taxable income in the year you contribute. As with a 401(k), investments inside the account grow tax-deferred until you begin making withdrawals in retirement, which makes it a strong option for workers who expect to fall into a lower tax bracket after they stop working.
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For 2026, the IRS raised the annual contribution limit to $7,500 for workers under 50, with a $1,100 catch-up contribution now available for those aged 50 and older, bringing the maximum to $8,600. That catch-up amount increased for the first time in years under the SECURE 2.0 Act’s new cost-of-living adjustment provision.
“For savers who reinvest the tax savings, traditional wins; for savers who spend the refund, Roth wins by forcing discipline,” financial planner Larry Russell told The College Investor. Understanding which IRA structure fits your income trajectory is one of the most consequential decisions you can make for your long-term tax bill.
Health savings accounts double as a retirement fund
The phrase “high-deductible health plan” can make newly insured workers nervous, USA Today noted, but the account that comes with it may be the most powerful retirement savings vehicle in the entire tax code.
HSAs are triple tax-advantaged: Contributions are tax-deductible, investment growth is completely tax-free, and withdrawals used for qualified medical expenses are never taxed at any point, Fidelity Investments noted.
What makes the HSA function as a retirement account is the fact that funds never expire and can be carried forward indefinitely. After age 65, withdrawals for non-medical purposes no longer trigger the 20% penalty that applies to younger account holders, and those distributions are taxed as ordinary income, no differently than a traditional IRA withdrawal.
HSAs are more than just a short-term savings tool. They can serve as a critical component of the retirement readiness equation.
For 2026, individuals with qualifying plans can contribute up to $4,400, while families can contribute up to $8,750, the IRS confirmed. Workers aged 55 and older can add a $1,000 catch-up contribution on top of those limits.
A 65-year-old retiring today should expect to spend approximately $172,500 on health care throughout retirement, and a couple should budget roughly $345,000, according to Fidelity’s 2025 Retiree Health Care Cost Estimate.
How layering these 3 accounts strengthens your overall retirement plan
Each of the three accounts addresses a different gap a 401(k) leaves open. An HSA is the only account in the tax code where contributions, growth, and qualified medical withdrawals are all tax-free, which becomes useful as retiree health care costs climb, according to Fidelity.
A traditional IRA offers a current-year tax deduction that workers without a workplace plan, or those seeking a second tax-advantaged account, can use to lower their taxable income now. CDs hold near-term cash at a guaranteed rate, insulating money savers expect to spend in the next few years from market swings.
Used together, the three accounts cover three distinct retirement risks the 401(k) does not fully address on its own: medical-expense exposure, current-year tax liability, and short-term market risk on cash that savers can’t afford to lose.
Related: How to Rollover Your 401k (or 403b or 457b) to an IRA
