Clark Howard, the personal finance radio host and podcaster, had what at first might seem like unusual advice for a 25-year-old caller. Stop investing in your Roth IRA right now, he told Timothy. The caller had been employed for nearly two years and was considering a part-time MBA starting in the fall. Timothy laid out his situation: “I’m also already contributing enough to max out my Roth IRA, HSA, and 401(k) up to the match. To pay for an MBA, I’m afraid the money will really be tight unless I stop contributing.”
Howard said in this case, it makes sense to pause the Roth IRA contributions and reduce the 401(k) to the employer match only, while continuing to fund the HSA. He framed the MBA as an investment in future income and told Timothy to step contributions back up once the program ends, estimated at 18 to 24 months.
What Howard Is Actually Saying About Sequencing
The financial concept at play is contribution sequencing: the order and timing of where you put money matters, and temporarily redirecting cash flow toward a higher-return use is rational. Howard is telling Timothy to treat the MBA as a short-duration investment that deserves priority capital right now, with the expectation that Roth IRA contributions resume once the program ends.
Consider Timothy’s actual budget. His rent is nearly 30% of his monthly income. Adding MBA costs on top of maxed retirement contributions leaves almost no margin. Borrowing to cover the gap means paying interest. Cutting contributions temporarily means forgoing some tax-advantaged growth, but it also avoids debt service costs and the financial stress that comes with running too tight a budget.
A Roth IRA pause of 18 to 24 months at the 2026 contribution limit of $7,500 per year means forgoing approximately $15,000 in contributions. At a long-term average equity return, that gap is recoverable over a 35-plus year horizon. A 25-year-old has time on their side in a way a 45-year-old does not, and the compounding loss from two years of missed contributions is manageable when weighed against the income premium a completed MBA can generate. According to the GMAC 2025 Corporate Recruiters Survey, the median salary for U.S. MBA graduates is projected at $125,000, a figure that is 67% above the $75,000 median for bachelor’s degree holders.
Why the HSA Survives the Cut
Howard’s instruction to keep the HSA funded while pausing the Roth reflects a structural difference between the two accounts. A Roth IRA grows tax-free on investments you have already paid tax on. An HSA offers a triple tax advantage: contributions reduce taxable income now, growth is tax-free, and withdrawals for qualified medical expenses are also tax-free. No other account in the U.S. tax code delivers all three simultaneously.
“I would want you to continue contributing to the HSA,” Howard said. “Because the financial advantage over the years is enormous.” That advantage is becoming more valuable by the year. Healthcare costs are rising well above general inflation, with U.S. employer-sponsored medical costs projected to climb roughly 9.6% in 2026, according to WTW’s 2026 Global Medical Trends report. For 2026, the IRS set the HSA contribution limit at $4,400 for self-only coverage and $8,750 for family coverage. Every dollar invested inside an HSA today compounds tax-free against that accelerating cost base.
Who This Logic Fits, and Who Should Think Twice
Howard’s framework works well for someone matching Timothy’s profile: early career, high future income potential, short program duration, and an employer covering part of the cost. Timothy’s company offers $3,000 per year in tuition reimbursement, which reduces the net cost of the degree and shortens the payback period further.
The same advice applied to a 45-year-old with $150,000 saved and 20 years until retirement would be far more damaging. At that stage, two years of missed Roth contributions carry much heavier compounding consequences and far less runway to recover. The pause-and-resume strategy only works when the pause is genuinely short and the income payoff is credible.
Someone carrying significant high-interest debt should also think carefully before following this path. If pausing Roth contributions frees up cash that can go toward 20% credit card balances, that is a better use of capital than any tax-advantaged account. But if the freed cash simply funds lifestyle spending rather than education or debt reduction, the calculus breaks down entirely.
What Timothy Should Do Next
- Reduce 401(k) contributions to exactly the employer match and stop there. Free money from an employer match still beats any other guaranteed return available. For 2026, the IRS raised the 401(k) employee contribution ceiling to $24,500, but Timothy has no obligation to reach it during the MBA program.
- Pause Roth IRA contributions for the duration of the MBA program. Set a calendar reminder to restart them the month after graduation. At $7,500 per year (the 2026 limit), even a two-year pause is recoverable over a multi-decade investment horizon.
- Keep HSA contributions at their current level. If possible, invest the HSA balance in low-cost index funds rather than leaving it in cash, so the triple tax advantage compounds over time.
- Track the tuition reimbursement timeline carefully. The $3,000 annual employer benefit should be claimed every year the program runs, reducing the true out-of-pocket cost of the degree.
Howard called Timothy “an industrious person to work full-time and go get that MBA at night.” A short-term contribution pause to fund a degree with a real income payoff is a deliberate trade worth making, provided Timothy restores his full savings rate the moment the program ends.
Editor’s note: This article was updated to reflect 2026 IRS contribution limits: the Roth IRA annual limit is now $7,500 (up from $7,000 in 2025), the 401(k) employee ceiling rose to $24,500, and the HSA self-only limit increased to $4,400. The two-year Roth contribution gap figure was revised from roughly $14,000 to approximately $15,000 to reflect the higher 2026 limit. The healthcare cost inflation figure was updated from the original “about 3%” to the WTW-projected 9.6% U.S. employer medical cost increase for 2026, and GMAC 2025 Corporate Recruiters Survey data on MBA median salary ($125,000) was added to support the income-premium argument.
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