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Navigating IRA Options for California Medical Doctors

retirement planning Feb 06, 2024

As a California doctor navigating your retirement planning, choosing the right IRA early on can optimize growth, tax incentives, and your estate strategy for decades to come. With diverse options available, what is the best IRA solution for busy medical professionals in the Golden State? This guide examines key IRA varieties, outlining the pros and cons of each.

Why IRAs?

With the demanding schedules and high costs doctors face when running their practices, saving adequately for retirement poses real challenges. Fortunately, IRAs present tailored solutions allowing California physicians to automate their savings while benefiting from major tax perks.  

When used in tandem with other retirement accounts like 401ks, pensions, the TSP, brokerages, and real estate, IRAs expand income streams designed to last well into your later years. A great financial advisor can help California doctors build custom strategies leveraging IRAs to achieve retirement readiness, replace the majority of your pre-retirement income, and even build a legacy for beneficiaries.

(Not to toot our own horn, but we've been doing it for over thirty years!)

Main IRA Options

While arrangement details may vary, most California doctors choose between traditional and Roth IRAs. Below we outline the core pros and cons of each:

Traditional IRAs


- Contributions can be tax-deductible in the current tax year

- Funds grow tax-deferred over decades, maximizing compound interest

- Some withdrawals pre-age 59.5 are penalty-free for medical expenses 


- Mandatory withdrawals begin at age 72, losing future tax-deferred growth

- All withdrawals are taxed as ordinary income  


Roth IRAs


- Contributions grow tax-free for decades without required withdrawals  

- Qualified Roth withdrawals are 100% tax-free for account holder

- Roth IRAs have no RMDs so can continue growing indefinitely

- Income tax-free inheritance for beneficiaries


- No up front tax deduction benefits like traditional IRAs

- Strict rules around timing, holding periods, and withdrawal ordering

Smart IRA Strategies for Doctors

The ideal IRA solution depends greatly on each doctor's unique situation - from income levels to retirement timeline and goals for wealth transfer. By modeling projected taxes in retirement versus today, advisors can guide physicians to traditional or Roth IRAs optimized for their needs. 

Younger California doctors have the most to gain from decades of Roth IRA compound growth and tax-free withdrawals later on. By contrast, those in higher tax brackets nearing retirement may benefit more from traditional IRA deductions today versus uncertain taxes in the future.

No matter your career stage, starting to shift funds into IRAs early allows California medical professionals to leverage time and optimized rates of return. This growth over 30+ years can provide greater flexibility for retirement, inherited wealth for beneficiaries, and balance against pension restrictions.


Let's Connect 

We've been working with California medical doctors for over 30 years, but you don't have to be in California to check on your retirement plans and see if you need to improve. In fact, you can start with a no-cost evaluation with us, in-person in our Roseville office, or online. 

Questions? Call or Contact Us.

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