Family Medicine Retirement

The Employed Menu: Three Systems, Three Plan Shapes

Most family physicians are employed, and the employer decides which accounts exist before you decide anything. At a nonprofit system the core plan is usually a 403(b). At a for profit group it is a 401(k). Both share the 2026 elective deferral limit of $24,500. Either plan can carry the employer match, and capturing the full match, free money with a 100 percent return, is step one of the waterfall.

Public and county systems add the layer that makes employed family medicine powerful: a governmental 457(b) alongside the 403(b), a second, separate plan with its own room. Some public systems add a pension on top, which can serve as a floor under retirement. It depends on staying and on the health of the system paying it, so never let a promised pension talk you out of the match or the Roth space in front of you today.

Read the 457(b) label carefully: the advantage on this page belongs to the governmental plan, and a nonprofit 457(b) is a different kind of plan, with exposure to the employer itself.

Why the Governmental 457(b) Deserves Its Own Section

Money in a governmental 457(b) is available when you separate from the employer, without the 10 percent early withdrawal penalty that applies to other retirement plans. Other plans generally add that penalty on top of ordinary income tax. Separate from a county or public employer, and the balance can be withdrawn with income tax due, but no added penalty, whatever your age. That makes this plan the natural bridge account for an early or phased retirement, and family medicine, with its deep presence in public and safety net systems, gets this advantage more often than most specialties.

Flexibility is not a reason to raid the account. Withdrawals are still taxed as income, and the plan sits in the funding order, inside the max tier after the core plan is full. Used in order, it is a powerful second engine.

The Two Menus, Side by Side

Employed practice hands you a menu and a match. Independent practice hands you control and the full funding burden.

Notice what the table does not change: the order. The menu decides which accounts you fill. The waterfall decides when you fill them.

The Independent Menu: Control, With the Whole Bill

Go independent and the best core account is usually a solo 401(k). It takes your $24,500 employee deferral for 2026 plus an employer contribution from your own practice, up to the $72,000 total annual additions limit. One caution: the $24,500 deferral is one limit shared across every plan you hold. A SEP IRA takes employer contributions only, gives you no employee deferral, and can complicate the backdoor Roth. For most single physician practices, the solo 401(k) usually wins.

Cash balance plans belong to a later chapter. This pension style plan can allow deductible contributions well beyond the solo 401(k) limit for an older, profitable, stable practice, but it requires professional administration, actuarial work, and a multi year commitment to funding it in lean years as well as good ones. Excellent for a mature practice, it is a poor fit for a first year owner still building reserves.

HSA First Inside the Max Tier

Inside the max tier, the health savings account goes first. If your job offers a high deductible health plan with an HSA, the 2026 limits are $4,400 for self only coverage and $8,750 for family coverage. The HSA earns first place because money goes in before tax, grows without tax, and comes out without tax when it pays for medical care. After the HSA, fill the 401(k) or 403(b) to $24,500. Then fill the governmental 457(b) if your system offers one, and the mega backdoor last, where the plan allows it.

How PSLF and NHSC Years Reorder the Funding

While forgiveness is pending, your loans are not a debt emergency. They are a countdown, and the funding order bends around them. Public Service Loan Forgiveness cancels the remaining balance after 120 qualifying monthly payments made full time for a qualifying government or nonprofit employer, and many FQHCs and nonprofit systems qualify. The National Health Service Corps Loan Repayment Program offers up to $75,000 in loan repayment, tax free, for a two year full time initial term at approved sites in primary care shortage areas, with continuation awards of up to $20,000 per additional year.

Loans on a forgiveness track stay on minimum payments, with recertification kept current, and never receive extra principal, because extra principal on a loan that will be forgiven is money given away. The freed cash flow goes where the waterfall points: the full match, the reserve steps, and Roth space. Family medicine residency is three years, likely the lowest tax bracket of your life. A direct Roth IRA contribution in residency, up to the $7,500 limit for 2026, buys decades of tax free growth at the cheapest price of your life.

At attending income the backdoor Roth takes the place of the direct contribution: a nondeductible IRA contribution of up to $7,500 for 2026, converted to Roth. It sits at step six in the waterfall, ahead of student debt priced above 7 percent, because Roth space expires every year and can never be bought back. Loans on a PSLF track are excluded from that debt step entirely.

The Savings Rate Reality, and the Part Time Shape

The average salary is $288,000, the median is $305,000, and the average starting salary is $291,000. The system that makes those numbers enough is the Double Up Rule: live on double your resident net, $65,000 of resident lifestyle becoming a $130,000 attending lifestyle, and send every dollar above it down the waterfall.

You may not leave the rule until you reach the taxable account, and finishing in one to four years is normal here. On the way, reserves finish at six months of expenses on W2 income or up to twelve months on 1099 or sporadic income, an endpoint set by employment type only, never by specialty.

Part time and late career shapes bend the timeline without breaking the order. A physician who cuts back should protect the match and the Roth space first, because those pieces expire annually. Late in practice, lean on what your menu built: a pension floor and the governmental 457(b), or a cash balance plan if you are independent. In every shape, ask what expires this year.

Common Pitfalls