What Should a Physician Do After Maxing Out Their 401(k)?

For 2026, the employee elective deferral limit for 401(k) and 403(b) plans is $24,500. Participants age 50 or older can add a catch-up contribution of $8,000, for a total of $32,500. Under SECURE 2.0, participants ages 60-63 have a higher catch-up of $11,250, bringing their total to $35,750, where the plan permits it.

That employee deferral figure is only part of the picture. The total 401(k) limit, including employer contributions such as a match or profit-sharing, is $72,000 for 2026, rising to $80,000 with the standard age 50+ catch-up and up to $83,250 for participants ages 60-63. A physician who has hit the $24,500 employee deferral limit has not necessarily reached the overall plan limit, particularly if the employer plan allows after-tax contributions on top of the employee deferral and employer match.

Whether there is room left in a 401(k) beyond the employee deferral depends on the specific plan design, which is worth confirming with a plan administrator before assuming the account is fully maxed out (see the IRS announcement of 2026 retirement plan limits).

For 2026, HSA contribution limits are $4,400 for self-only coverage and $8,750 for family coverage, plus an additional $1,000 catch-up for each eligible individual age 55 or older. Access to an HSA requires enrollment in a qualifying high-deductible health plan (HDHP); physicians without an HDHP cannot use this strategy regardless of income.

An HSA offers what is generally described as a triple tax advantage: contributions are tax-deductible (or pre-tax through payroll), growth inside the account is tax-free, and withdrawals for qualified medical expenses are tax-free at any age. After age 65, non-medical withdrawals are taxed as ordinary income, similar to a traditional IRA, while withdrawals for qualified medical expenses remain tax-free regardless of age.

Not every physician should switch to an HDHP purely to access an HSA. Whether an HDHP makes sense depends on expected medical expenses, the premium difference between plan options, and what an employer actually offers, so this is a decision to evaluate against your own health plan options rather than a default recommendation.

Once the tax-advantaged options above are exhausted, or in some cases before, a taxable brokerage account provides flexibility that retirement accounts do not: no contribution limit, no income restriction, and no early withdrawal penalty. Assets in a taxable account are also available at any time, and under current law they are not subject to required minimum distributions.

Tax efficiency matters more in a taxable account than in a tax-advantaged one, since investment earnings are generally taxable each year. Low-turnover index funds, exchange-traded funds, or direct indexing may help reduce realized capital gains along the way, and tax-loss harvesting can offset realized gains and up to $3,000 of ordinary income per year. Municipal bonds may provide income that is exempt from federal tax, and sometimes state tax as well, though the benefit depends on your bracket and state of residence.

The trade-off against that flexibility is annual taxation: dividends and realized gains are generally taxed in the year they occur, and gains on positions held a year or less are taxed at ordinary income rates rather than the lower long-term capital gains rates. Our guide to tax-loss harvesting for high-income earners goes deeper on the wash-sale rule and year-end timing considerations for a taxable account.

A general priority framework that many physicians find useful as a starting point looks something like this: capture the full employer match first, if that has not already happened; maximize an HSA where eligible, given the triple tax advantage; fund a Backdoor Roth IRA where the pro-rata rule allows it to work cleanly; use after-tax 401(k) contributions and a mega backdoor Roth where the plan permits it; direct additional savings to a tax-efficient taxable brokerage account; and, for physicians with 1099 income, layer in self-employed plans such as a solo 401(k) or defined benefit plan.

This ordering is a general framework, not a specific recommendation for any individual physician. The right sequence depends on your tax bracket, state of residence, employment structure, age, and whether you already hold traditional IRA balances that would affect a backdoor Roth conversion through the pro-rata rule.

Maximizing every available tax-advantaged account is also not always the optimal path. A physician's projected required minimum distributions, expected future tax bracket, and need for liquidity before retirement age may justify directing some savings to a taxable account earlier in the sequence rather than filling every tax-advantaged option first. Our guide to financial planning for physicians looks at how these savings decisions connect to student loan payoff, disability insurance, and tax bracket management across a physician's career.