Roth IRA During Residency Calculator

Residency is often the lowest-tax period of a physician's, dentist's or pharmacist's career. That makes it an ideal time to put money in a Roth IRA, where it grows tax-free for decades. This calculator shows what a few years of contributions during training could become, and how much tax you'd avoid.

What this calculator does

Enter your yearly Roth IRA contribution, the years of training you have left, the years from the end of training to retirement, an investment return, your tax rate now and your expected tax rate in retirement. It shows:

• the value at retirement, tax-free,
• the total contributed,
• the tax you pay now on those dollars, and
• the tax you avoid later compared with a pre-tax account.

The formula in plain English

Value at the end of training = each year's contribution, growing at your return until training ends.

Value at retirement = that balance, growing for the remaining years with no new contributions.

Tax paid now = the pre-tax income needed to make those contributions × your current tax rate.

Tax avoided later = value at retirement × your expected retirement tax rate. That's the tax you'd owe if the same money were in a pre-tax account.

A worked example

Dr. Lee has 4 years of training left and contributes the $7,500 maximum each year. She expects 30 years from the end of training to retirement, a 7% return, a 17% tax rate now and 28% in retirement.

• Total contributed: $30,000.
• Value at retirement: about $271,000, all tax-free.
• Tax paid now: about $6,100.
• Tax avoided later: about $76,000.

Four years of saving in residency could become more than a quarter of a million dollars, even if she never added another dollar.

Why it matters at each career stage

If you're: Student

If you have earned income from a summer job or research position, a Roth IRA is a great place to start. Even small amounts have decades to grow.

If you're: Resident / fellow

Set up automatic monthly contributions, even $100–$300 a month. Contribute for the prior year until the tax filing deadline, which lets you use a tax refund or moonlighting income.

If you're: Employed

Once your income passes the Roth limits (phase-out starting at $153,000 single and $242,000 married filing jointly in 2026), you can still contribute through the backdoor Roth.

Getting started

Open an account at a low-cost brokerage.

Choose simple investments. A target-date fund or a broad index fund is enough for most people.

Automate it. Monthly contributions are easier to keep up.

Keep the habit. After training, keep contributing every year using the backdoor Roth if needed.

Why the tax rate matters so much

The Roth advantage comes from paying tax at today's rate instead of tomorrow's. A resident in the 12% federal bracket paying a few percent in state tax gives up about 15 cents per dollar now. The same dollar withdrawn from a traditional account in retirement might be taxed at 22% to 32% or more. Over decades of growth, that difference can add up to tens of thousands of dollars. And Roth money gives you flexibility in retirement, because withdrawals don't raise your taxable income. That can help keep other income, like Social Security, from being taxed more.

Roth vs paying down loans

If you're pursuing PSLF, extra loan payments don't help, so a Roth IRA is often a better use of extra money. If you're not, compare the interest rate on your loans with expected returns. Many residents do both: required loan payments plus a modest Roth contribution.

Next, compare Roth vs traditional, learn about the backdoor Roth, and see your resident take-home pay.