PHYSICIAN RETIREMENT PLAN OPTIONS
As you transition from residency to attending role, your income—and financial responsibilities—grow significantly. This is the perfect time to take retirement planning seriously. Building a tax-efficient, long- term investment strategy now can help you secure financial independence and reduce future stress.
Below is a quick overview of the retirement plan options available to physicians as they advance in their careers:
1. Employer-Sponsored 401(k) or 403(b)
These are the most common retirement plans offered by hospitals and health systems. In 2025, you can contribute up to $23,500 (plus $7,500 catch-up if you’re 50 or older). Many employers match a portion of your contributions, which is essentially free money.
✅ Action Step: Contribute at least enough to get the full employer match. Consider maxing out as your income stabilizes.
2. Roth 401(k) or Roth 403(b)
If your employer offers a Roth option, you can contribute after-tax dollars today and withdraw the money tax-free in retirement. This is a strong option for younger physicians in lower tax brackets or those expecting tax rates to rise.
✅ Tip: A mix of traditional and Roth contributions may offer more flexibility in retirement.
3. Backdoor Roth IRA
As an attending, your income may exceed the limits for regular Roth IRA contributions. The Backdoor Roth IRA allows you to legally bypass those limits by contributing to a Traditional IRA and converting it to a Roth. This strategy allows your investments to grow and be withdrawn tax-free in retirement. ⚠️ Note: Make sure you don’t have pre-tax IRAs that trigger the pro-rata rule. A fiduciary advisor can help you navigate this.
4. SEP IRA or Solo 401(k)
If you earn extra income through moonlighting or consulting (1099 income), you may qualify for a SEP IRAor Solo 401(k). These plans allow for significant additional retirement contributions—25% of eligible employee compensation up to $70,000 in 2025 depending on income and plan structure. ✅ Ideal for: Physicians with side income looking to save aggressively and reduce taxes.
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