February 5, 206
As a dental practice owner, your retirement strategy should balance tax efficiency, income growth, and long-term wealth building.
Individual Retirement Accounts (IRAs) remain foundational tools for both tax-deferred and tax-free growth. With the IRS updating contribution limits and income phase-outs each year, staying current lets you optimize retirement funding and make smart decisions for your practice and personal financial future.
This guide explains the 2025 (it’s not too late to fund for 2025!) and 2026 IRA, and Roth IRA limits, income eligibility, planning strategies like early funding and backdoor Roth conversions, and includes practical growth examples for dentists with high income.
Updated IRA Contribution Limits: What Dentists Need to Know
Traditional & Roth IRA Contribution Limits
For both Traditional and Roth IRAs, the combined annual contribution limit is the same and is indexed for inflation:
- 2025 limit: $7,000, fund by 04/15/2026.
- 2026 limit: $7,500, fund by 04/15/2027.
- Catch-up contribution (age 50+):
- 2025: An additional $1,000.
- 2026: An additional $1,100.
This means a dentist age 50 or older can contribute up to $8,600 in 2026 across all IRAs. These limits apply whether you fund a traditional IRA, a Roth IRA, or split between them.
Roth IRA Income Phase-Out Ranges
Roth IRAs have income limits that determine eligibility for full or partial contributions.
For 2025:
- Single filers: phase-out begins at $150,000 and ends at $165,000.
- Married filing jointly: phase-out begins at $236,000 and ends at $246,000.
For 2026:
- Single filers: full contribution below $153,000; phased out up to $168,000.
- Married filing jointly: full contribution below $242,000; phased out up to $252,000.
Dentists with high practice earnings often exceed these income ranges. When that happens, a backdoor Roth IRA strategy (a non-deductible traditional IRA contribution followed by a Roth conversion) becomes a core planning tool.
Learn more about why Backdoor Roth Conversions are important for dentists in our August 2024 article, Why Roth Matters: A Guide for Dentists.
Why Dentists Should Fund IRAs Early Each Year
Funding your IRA early in the calendar year gives your money more time to compound. For dental practice owners with steadily rising income, this advantage becomes meaningful over the course of decades.
Example: Early vs. Late Contributions
Assume a 35-year-old dentist contributes $7,500 annually and earns a 7% average return.
- Contributions made at the beginning of each year could grow to more than $800,000 after 30 years.
- Delaying contributions until tax filing season each year can reduce the final balance by tens of thousands of dollars.
Time in the market matters, especially when retirement savings are compounded over multiple decades.
Roth vs. Traditional IRA for Dental Practice Owners
Both account types serve a purpose, but they function differently from a tax perspective.
A traditional IRA may allow a tax deduction today, depending on income and workplace retirement plan coverage, but withdrawals are taxed in retirement.
A Roth IRA is funded with after-tax dollars, but qualified withdrawals are tax-free, and Roth IRAs are not subject to required minimum distributions. For dentists who expect continued income growth or higher tax rates later in life, Roth assets can provide valuable flexibility.
Practical IRA Planning Tips for Dentists
- Fund IRAs early in the year to maximize compounding.
- Use catch-up contributions once you reach age 50.
- Consider backdoor Roth strategies if income exceeds Roth limits.
- Monitor your modified adjusted gross income carefully.
- Coordinate IRA planning with 401(k), solo 401(k), or defined benefit plans.
Example: The Impact of Catch-Up Contributions
A dentist age 52, contributing the maximum allowed in 2025 and 2026, with a 7% annual return, could accumulate more than $145,000 over the next 10 years from IRA contributions alone. Catch-up contributions meaningfully accelerate retirement savings during peak earning years.
Final Thoughts
While IRA contribution limits may appear modest compared to practice income, consistent annual funding is critical to long-term retirement success. For dentists, IRAs complement higher-limit retirement plans and provide tax diversification, flexibility, and long-term compounding benefits.
Staying current on IRS limits and planning proactively ensures you take full advantage of every opportunity to build tax-efficient retirement wealth.
Not sure where to start? Contact us today!
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