If you do a quick search to find out how much you can contribute to a Roth 401k, you’ll usually find that the most you can defer from your salary into a Roth 401k is $23,500 (2025). In reality, with the right combination of circumstances, the maximum that can be contributed to a Roth environment is $70,000 (2025).* In this blog, we’ll talk about Mega Roth IRA strategies for dentists and physicians – but what we are about to say can apply to many other high-income professionals who find themselves disqualified for a Roth IRA by the IRS income limits.
But first -
Hello! I'm Sharon.
I'm an advice-only financial planner for dentists. Whether you're starting to build wealth, growing your practice, or preparing for retirement, I work with dentists in Kansas City and across the country to create clear, confident financial plans. If you would like to talk about your goals at any stage of your career, let's set up a time to connect.
Getting the most out of a dental retirement plan
Retirement planning for dentists and other physicians can be complicated. As a high-income earner, you are precluded from putting away large amounts of money on a Roth basis, which is usually more advantageous for the long term.
Can anything be done? Or are you doomed to the realm of the Traditional IRA and relegated to only saving on a pre-tax basis?
Let’s continue the example above. How can you fund the difference between that $23,500 and the true maximum of $70,000+?
Here are two common situations we see during annual meetings with our clients:
- Most dental practice owners who sponsor a 401k for their employees know how to get more than $23,500 into their 401k. A practice owner can fund the difference with a discretionary (optional) pre-tax profit-sharing contribution with money from the practice. To qualify for this, funding for eligible staff is also required, on a pro-rata basis. Several formulas for funding the staff profit sharing can be tested for best results. Profit-Sharing contributions are funded by the practice on a pre-tax basis.
- Another way to contribute funds in excess of the $23,500 ($31,000 or more with age 50+ catch up) salary deferral is to make Non-Roth Post-Tax contributions, up to the $70,000 ($77,500) maximum, eventually rolling the post-tax contributions to a Roth IRA.
The Non-Roth Post-Tax contribution is personally taxable, both FITA and FICA, but it has the potential to grow tax free if rolled to a Roth IRA. Some are calling this a “Mega Backdoor Roth”.
Over enough years, the tax hit on the front end may be well worth years of tax-free growth. As a dentist, your 401(k) is not the only part of financial planning – it’s important to have a vision of the taxes you are likely to pay over your lifetime. If you haven’t already, make sure to create a plan that includes all the moving parts:
- Cash flow management
- Debt management
- Insurance analysis
- Transition consideration
Read here for a more detailed look at what a proper financial plan for a dentist should entail.
Who can make Mega Backdoor Roth contributions?
Dental practice owners can make Mega Backdoor Roth contributions, but like profit sharing contributions, funding still is subject to 401k testing to make sure retirement plans are fair to all employees.
Even if you’re not a practice owner, an employee with a 401k can fund the difference themselves, but only if your 401k plan allows it – not many do. This would be a great strategy for anyone wanting to get more money into a Roth environment, and is particularly attractive for someone in a lower tax bracket.
This can all be in addition to a Roth or Backdoor Roth IRA contribution outside of your employer retirement plan.
Ready to Get Started?
Thanks for reading our blog about mega backdoor Roth contributions. If you'd like to talk about what financial planning looks like as a new dentist, a growing practice owner, or a dentist transitioning to retirement, contact us to set up a time to talk.
*If you’re over 50, add $7,500 to both of these numbers.