Optimize Your Next Dollar: 401(k) Match → ESPP → HSA → Roth → Brokerage

Want to be work-optional by 55? In this real-world case study, we map a clear order of operations for a two-income household, age 45 and 45, two kids, to build “Freedom Funds” using 401k match, ESPP, HSA, Roth, and a taxable brokerage. The goal is simple: maximum flexibility, minimum tax drag, and a realistic path to FI at 55.

WHAT YOU’LL LEARN
• The exact next-dollar flow: 401k match to ESPP at 15 percent discount to HSA max to Roth or backdoor Roth to Brokerage
• Why Roth basis plus brokerage equals flexibility before age 59.5
• A practical way to use ESPP gains to fund 529s without squeezing cash flow
• High-earner pitfalls to avoid: concentration risk, tax inefficiency, liquidity gaps

HOUSEHOLD SNAPSHOT
• Ages 45 and 45, incomes 250k and 100k
• Cash and savings 100k
• Pre-tax retirement 550k total
• Roth dollars 110k total
• Joint brokerage 250k with roughly 60k unrealized gains and 10k losses
• Company stock and ESPP for the higher-earning spouse
• Kids ages 15 and 13 with 529 balances
• Savings capacity about 36k per year net
• Target: financial independence at 55
• Minnesota tax references in this example

ORDER OF OPERATIONS USED

Capture both 401k matches

Allocate up to 10 percent of pay to ESPP at a 15 percent discount, hold one year plus one day for long-term capital gains and sell

Max the HSA for triple-tax advantage

Build Roth basis via Roth 401k or backdoor Roth

Direct remaining dollars to the taxable brokerage to grow the core freedom bucket
Bonus: Use a portion of ESPP gains to fund the 529s

RESULTS ILLUSTRATION
On this path, Roth could reach roughly 250k and brokerage roughly 600k in about 10 years, while pre-tax continues compounding toward seven figures. That mix gives multiple years of spending flexibility around age 55 without relying on age-59.5 rules.

CHAPTERS
00:00 Intro and who this is for
00:24 Household snapshot
01:18 Why flexibility matters for FI at 55
02:02 Next Dollar Framework overview
02:35 Step 1: 401k match
03:10 Step 2: ESPP cash-flow shimmy and long-term capital gains timing
04:38 Step 3: HSA max
05:28 Step 4: Roth and backdoor Roth
06:25 Step 5: 529s funded from ESPP gains
07:10 Step 6: Brokerage freedom bucket
08:05 Projected balances and runway to 55
09:12 Key risks to watch
10:02 What to do next

Free resources
• Next Dollar Framework Checklist https://wealth.newhorizonsbfs.com/fre...

• FI by 55 Planning Workbook - Email [email protected]

Work with us

Book a no-pressure Clarity Call: https://api.leadconnectorhq.com/widge...

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Disclosures: Educational only; not tax, legal, or investment advice. See full disclaimer below.

New Horizons Boutique Financial Services “NHBFS” provides education only. This video is not personal investment, tax, or legal advice. Investing involves risk, including loss of principal. Past performance is not indicative of future results. Examples including tax rates and Minnesota references are illustrative and may not apply to your situation. Consult your own advisors before implementing any strategy. NHBFS is not affiliated with your employer; ESPP/RSU plans vary review your plan documents.