Roth While Your Bracket Is Low

Now or later

A traditional contribution is deducted now and taxed later. A Roth contribution is taxed now and not again on qualified withdrawals, growth included. The choice comes down to one comparison: your tax rate today against your tax rate when the money comes out. A resident in the 12 or 22 percent bracket who will retire, or simply practice, in the 32 to 37 percent brackets should prefer Roth almost every time. The same physician at attending income should usually flip to traditional deferrals and use the Backdoor Roth for Roth space instead.

The two Roth doors in training

The first door is the Roth option inside your 403(b) or 401(k), if the plan offers one; contributions there count toward the same $24,500 limit as traditional deferrals. The second is a Roth IRA, with a 2026 limit of $7,500 per person and a direct-contribution income limit that begins to phase out at $153,000 for single filers and $242,000 for joint filers. Nearly every resident qualifies to contribute directly. Fund the match first, then the Roth IRA, then more Roth 403(b) if there is room.

Where to open it and what to hold

Any major low-cost brokerage works. Inside the account, hold broad, low-cost index funds: a total U.S. market fund, an international fund, and, if you want it, a bond fund. Costs are the one variable you control, and a difference of half a percent a year compounds into years of retirement over a career.

Set the contribution to happen automatically each month rather than in a lump at year end. It removes the decision, and it removes the temptation to time the market, which no one does well.

The mistake residents make

Waiting. Residents who skip the Roth years because the amounts feel small give up the cheapest Roth dollars they will ever have. Two thousand dollars a year for five years of training, contributed in a low bracket and left alone, is worth far more than the same dollars at attending rates.