Short answer: most practicing dentists earn too much to contribute to a Roth IRA directly, but the “backdoor Roth” is a legal, IRS-acknowledged workaround — you contribute to a traditional IRA and then convert it to Roth. It’s powerful, but one rule trips people up.
Can dentists contribute to a Roth IRA?
Directly, often no. Roth IRA contributions phase out above certain income levels, and most practicing dentists exceed them. That’s where the backdoor strategy comes in.
What is a backdoor Roth IRA?
- Contribute to a traditional (non-deductible) IRA.
- Shortly after, convert that traditional IRA to a Roth IRA.
- Because high earners get no deduction going in, the conversion is generally low- or no-tax — and the money then grows tax-free in the Roth.
What is a mega backdoor Roth?
If your practice 401(k) allows after-tax contributions and in-plan conversions, a “mega backdoor Roth” can move a much larger amount into Roth each year than the IRA version. It depends entirely on your plan’s design — a good reason to coordinate your retirement plan design with this strategy.
Should you do Roth conversions?
Roth conversions (moving pre-tax retirement money to Roth and paying tax now) can make sense in lower-income years — for example, the gap between selling a practice and starting withdrawals. Whether it’s worth it depends on your current vs. future tax rates, so it belongs in a coordinated tax plan with your CPA.
Frequently asked questions
Yes. It is a widely used strategy that the IRS has acknowledged. As with any tax strategy, it must be executed correctly and reported properly — coordinate with your CPA.
It’s an IRS rule that treats all your traditional IRA balances as one pool when you convert, so pre-tax money makes part of your conversion taxable. Holding pre-tax IRA balances can therefore create an unexpected tax bill on a backdoor Roth.
Sources
Founder & Financial Planner · Investment Adviser Representative · Series 63 & 65
Ian McGinnis is a financial planner and founder of Dental Wealth Partners, a non-commission, fee-only financial planning firm for dentists. He is the author of The Wealthy Dentist: Smarter Money. Less Stress. More Life. and hosts the Smiles & Cents podcast.
Keep reading
- Tax planning strategies for dental practice ownersProactive, year-round tax strategies for dental practice owners — entity choice, retirement plans, income timing, and coordinating with your CPA.
- Retirement plans for dental practices, comparedA comparison of 401(k), safe harbor, profit sharing, SEP-IRA, and cash balance plans for dental practice owners — and how to choose.
- Cash balance plans for dentists, explainedHow high-income dental practice owners can use a cash balance plan to shelter more than a 401(k) allows — and how to tell whether it fits.