Taxable Brokerage Account
Once you have maxed out all tax-advantaged accounts (401k, IRA, HSA, Mega Backdoor Roth), a taxable brokerage account is the next step. There are no contribution limits, no income restrictions, and no early withdrawal penalties. While you won't get the same tax benefits, the flexibility and unlimited growth potential make it essential for building wealth beyond retirement accounts.
2026 IRS Contribution Limits
Key Details
No contribution limits means you can invest as much as you want each year, making this ideal for high earners who have maxed all other accounts.
Long-term capital gains (held > 1 year) are taxed at favorable rates: 0% if taxable income is under ~$47,025 (single), 15% up to ~$518,900, and 20% above.
Qualified dividends receive the same preferential tax rates as long-term capital gains.
Tax-loss harvesting allows you to sell losing investments to offset gains and reduce your tax bill by up to $3,000/year against ordinary income.
Consider holding tax-efficient investments (index funds, ETFs) in your brokerage and tax-inefficient ones (bonds, REITs) in tax-advantaged accounts.
No Required Minimum Distributions (RMDs) and no early withdrawal penalties, giving you full flexibility to access your money anytime.
A step-up in cost basis at death means your heirs may inherit investments without owing capital gains tax on appreciation during your lifetime.
Popular brokerages include Fidelity, Vanguard, and Charles Schwab, all offering low-cost index funds with zero or near-zero expense ratios.