Should I open a Roth IRA as an ophthalmology resident?

Why the resident Roth outranks almost everything

The Roth in training is not really an investment decision. It is a tax rate arbitrage with a deadline. The resident contributes dollars taxed at the margin of a trainee income, and the attending will one day withdraw dollars that would otherwise be taxed at the margin of an ophthalmology income, in a specialty whose surveys average $446,000 to $548,600. The spread between those two rates is the return on the decision, and it is collected on top of whatever the investments earn. No other account available to a resident offers it: the program's retirement plan defers tax into the attending years at attending rates, which is still valuable and still outranked by the match alone, and a taxable account offers no rate advantage at all.

The deadline is the second half of the case. IRA space is annual and unrecoverable. A resident who skips the internship year has not postponed a $7,500 contribution. That year's space no longer exists, and at attending income the only route back into a Roth is the backdoor conversion, at the same $7,500 annual limit, in a year when the tax on everything else is far higher. Four training years of full contributions build a $30,000 base of contributions whose growth is never taxed again, started at the age when compounding has the longest runway of the entire career. Households that build the habit in training also arrive at attending life with the account open, the mechanics learned, and the backdoor route ready to run.

The attending comparison, stated now

It is worth pricing what the same contribution costs later, because the comparison is the whole argument. At attending income, direct Roth contributions are closed by the income limits, so the attending uses the backdoor route: a nondeductible traditional IRA contribution converted to Roth. The space is the same $7,500 a year. What changes is everything around it. The attending's marginal rate prices every other decision on this site, the conversion has to be managed against any pre tax IRA balances, and the contribution now competes with the full waterfall at attending scale: the maxed workplace plans, the finished reserve, and the first taxable dollars. The resident's $7,500 is bought in the cheapest tax year of the career with the simplest mechanics the account ever offers. Skipping it to send extra principal to loans on a forgiveness track is the most common ranking error in trainee finance, and it is an error in both directions at once: the loan payment buys nothing the program would not have cancelled, and the Roth year cannot be repurchased at any price.

The habit the Roth is really building

The dollar amounts in training are small next to attending money, and that is precisely why the account matters. A physician who automates a contribution in the internship year has built the machine the attending salary will later pour through: the account, the automation, the annual habit of filling tax advantaged space in order. The waterfall at attending scale is this same discipline with more zeros, the HSA and the workplace plans and the backdoor Roth filled in sequence, and the physicians who run it well are almost never learning it from zero in the first attending year. Open the Roth in training, fund it after the match and the reserve and the cards, and let the habit compound along with the money.