Picture two doors. Behind one, a sign reads "pay your tax now." Behind the other, "pay your tax later." That, stripped of all the jargon, is the Roth question, and almost every physician walks up to it within a year or two of training.
A traditional retirement account is the "pay later" door. You contribute pre-tax dollars, get a deduction today, let the money grow, and pay income tax when you withdraw it in retirement. A Roth account is the "pay now" door. You contribute dollars you have already paid tax on, get no deduction today, and in exchange the money grows and comes out completely tax-free later.
So which door is better? The honest answer is that it hinges on a single unknowable thing: whether your tax rate will be higher now or in retirement. If your rate will be lower in the future, paying tax later tends to win. If your rate will be higher in the future, paying tax now tends to win. The trouble is that nobody has a reliable crystal ball for future tax rates.
Physicians do, however, have one clue that civilians do not. Residency and fellowship are very often the lowest tax brackets a doctor will ever occupy. Income is modest, and the future, with its attending salary, is almost certainly going to be taxed higher. That combination is why the training years get talked about as a window for the "pay now" Roth door, when paying the tax is comparatively cheap.
Once you become an attending, the picture flips. A high earner in a top bracket may find the up-front deduction of a traditional contribution genuinely valuable today. But Roth accounts have no required withdrawals during your lifetime, and holding some of each type gives you flexibility to manage your taxable income in retirement.
Because the right mix depends on your bracket today, your expectations for tomorrow, and how much flexibility you want down the road, this is a wonderful question to think through together rather than alone. We're here to take care of you, and our team can help you weigh the two doors against your actual numbers.
