OB/GYN Retirement: Employed Plans, Partner Plans, and Uneven Incomes

The order the money moves matters more than the account it lands in. The waterfall runs in ten steps, and retirement accounts sit inside it rather than above it. First, capture the full employer match, and nothing past it. Second, hold one month of reserves sized at the new lifestyle. Third, bring credit cards to zero. Fourth, put coverage in place, disability above all, plus term life, plus umbrella. Fifth, run the student loan plan in parallel: on the Public Service Loan Forgiveness track that means minimum payments and recertification on schedule, never a dollar extra. Sixth, fund the backdoor Roth IRA at $7,500 for 2026, before paying down debt above 7 percent. Seventh, max retirement in its own internal order, covered below. Eighth, add two more months of reserves, for three total. Ninth, extinguish the remaining debt above 7 percent, with Public Service Loan Forgiveness loans excluded. Tenth, finish the reserve, and only then send the first dollar to taxable, alongside written goals.

Two companion rules hold the order together. The Double Up Rule sets the lifestyle: live on double the resident net, so a $65,000 training net becomes a $130,000 attending lifestyle, and every dollar above it flows the waterfall until the taxable account is reached. The three buckets name where the money ends up: Safety Net, Wealth Engine, and Accelerator. Retirement accounts are the Wealth Engine in sheltered form. The full sequence is worked in the retirement funding order question, and the frame sits on the OB/GYN hub and the three bucket framework page.

The employed menu is stronger than it looks, because two plans can stack on one salary. The 403(b) at a hospital system takes $24,500 of elective deferrals in 2026, and many systems add an employer contribution on top of the match. Where the employer is a governmental system, a governmental 457(b) takes another $24,500 under its own separate limit. Add the two doors and the arithmetic is plain: $24,500 plus $24,500 is $49,000 of elective deferrals before any employer contribution is counted, and the governmental 457(b) sits outside the $72,000 total annual additions ceiling that governs the 403(b). This specialty can meet that stacking where a public system offers both plans. The stacking is worked in the 403(b) and 457(b) stacking question.

Inside the max retirement tier, the health savings account goes first where the health plan qualifies: $4,400 for self only coverage and $8,750 for family coverage in 2026. Then the 403(b) to its $24,500 limit, then the governmental 457(b) to its own. Read the 457(b) label before funding it. A governmental 457(b) is held in trust for the participant. A nongovernmental 457(b) at a private nonprofit system is an unsecured promise of the employer, exposed to the creditors of the system, with distribution choices to make carefully at exit. Fund the governmental version in order. Fund the nongovernmental version late and cautiously, with the credit of the system read honestly.

A partnership plan must fit partners who need different shelter in the same year. Start with the base every group shares. The 401(k) gives each partner the same deferral door, $24,500 in 2026, and profit sharing adds an employer contribution allocated by a formula the group chooses, up to the $72,000 total annual additions ceiling per person for 2026. Formulas commonly allocate in proportion to pay, or weight pay and age together so older partners receive larger allocations inside the same plan. Safe harbor designs keep the plan compliant without annual testing problems. For a group whose partners earn near each other, that stack is the whole answer, and its virtue is simplicity: each balance belongs to the partner who owns it and travels at exit.

The stack strains exactly where this specialty lives. Average compensation is $390,000 in the Medscape Physician Compensation Report 2026, and a mature partnership spreads widely around that center: a new partner in the first distribution years and a senior partner near the peak with the shortest runway of all. The senior partner has the largest tax bill and the fewest years left to fund, and the ceiling gives that partner the same $72,000 of room it gives the partner with thirty years to go. Equal room is not equal fit. That mismatch is the spread income problem, a design problem rather than a savings problem: no partner can save past a ceiling the plan itself sets. Groups answer it by shaping the profit sharing formula first, and then, where the spread is wide and the income is durable, by adding the layer in the next section. The fit decision is worked in the spread income plan question, and the ownership terms are priced on the ownership page.

A cash balance plan funds a promised benefit, and that one fact is why it fits the spread. The mechanics are structural, from the Internal Revenue Service. A cash balance plan is a defined benefit plan whose promised benefit is stated as a hypothetical account balance. The employer funds it with actuarially determined contributions. Each account is credited with pay credits and interest credits set by the plan formula. The employer, not the participant, bears the investment risk, because the benefit owed is the stated balance rather than whatever a portfolio did. The plan pairs commonly with a 401(k) profit sharing plan: the 401(k) stays the flexible base, and the cash balance layer does the heavy funding for partners whose window is short.

The reason the layer answers the spread is time. A defined contribution plan shelters the same annual amount for a partner with thirty working years left as for a partner with eight. A defined benefit design funds a benefit promised at retirement age, so the required funding for the older partner is far larger than any defined contribution limit allows over the same window. That is the shape of earnings in this specialty, where the obstetric years concentrate the highest income as the retirement window narrows. No dollar cap is stated here, on purpose: the funding for a given partner is an actuarial output of age, pay, and the plan formula. The trade for the room is commitment. Contributions are required in lean years as well as strong ones, and a group that cannot fund the promise through a hard premium year should not make it. The decision is worked in the cash balance plan question, and the shelter order sits on the tax efficiency ladder.

The backdoor Roth IRA sits early, and the mega backdoor sits last in max retirement. The backdoor Roth IRA is step six of the waterfall, funded before debt above 7 percent and before the workplace plans are maxed: $7,500 for 2026, per spouse where the household has two, run through a nondeductible traditional IRA contribution and a conversion, with existing pre tax IRA balances read first because they change the tax on the conversion. The logic of the placement is durability: the Roth space expires each year whether it is used or not, it belongs to the individual rather than the employer, and it survives every job change a career in this specialty produces.

The mega backdoor Roth is a different instrument with a similar name, at the opposite end of the tier. Where a workplace plan allows after tax contributions beyond the deferral limit, up to the $72,000 total annual additions ceiling, with conversion inside the plan or out to a Roth IRA, the mega backdoor fills the space the deferral and employer contributions leave unused. It is the last move inside step seven, after the health savings account, after the 403(b) or 401(k) to $24,500, and after the governmental 457(b) where one exists. Many plans do not allow it. The check is worked in the mega backdoor check question. After age 50, the same accounts gain catch up room by mechanism: the deferral ceiling inside a 401(k), a 403(b), and a governmental 457(b) rises for older physicians, and the stacking of those raised ceilings is worked in the catch up stacking question. This page states no catch up dollar figure, because the placement is what the order needs.

The reserve is finished before taxable investing, sized by employment type alone. The finished reserve is six months of expenses on W2 income, and up to twelve months on 1099 or sporadic income. The rule never sizes by specialty or by income: it sizes by how the income arrives and how quickly it could stop. A hospital employed physician with a stable salary finishes at six months. A partner whose distributions move with production and the premium cycle holds toward the longer end of the range the employment shape earns, because partnership income is less steady than a system salary, and the reserve is where that difference is admitted in cash. The waterfall builds it in stages: one month early, three months after coverage and the backdoor Roth, and the full finish before the first taxable dollar.

The finish line matters here because the exits in this specialty are expensive and dated. Every job change, every partnership exit, and retirement itself can trigger the tail question on claims made coverage, priced on the malpractice page, and a household that meets that bill from a finished reserve treats it as a planned cost. Build the menus in order, let the spread layer work in the peak years, finish the reserve, and the plan runs the same way in the employed years, the partnership years, and the quieter years after obstetrics ends.

Internal Revenue Service, Notice 2025-67 (2026 deferral limit of $24,500, total annual additions of $72,000, and IRA limit of $7,500, accessed October 2026)

Internal Revenue Service, Revenue Procedure 2025-19 (2026 health savings account limits of $4,400 self only and $8,750 family, accessed October 2026)

Internal Revenue Service, cash balance plans (a defined benefit plan stating the promised benefit as a hypothetical account balance, funded by the employer, with investment risk borne by the employer, accessed October 2026)

Medscape Physician Compensation Report 2026 (OB/GYN average of $390,000, accessed October 2026)

Ryan Inman is a retired financial planner who worked with about 500 physician families. He created the Financial Residency podcast (about 3 million downloads) and is no longer affiliated with it. Financial Fellowship is his sole focus. This guide is educational. Last updated October 2026.