Which Retirement Account to Fill First in Healthcare

• Your employer’s plans
• The order
• 457(b) rules
• Roth or traditional
• Getting it out early

Where you work decides which accounts you get

Your job title doesn’t pick your retirement plan. Your employer’s tax status does. A nurse at a county hospital and a nurse at a for-profit chain can have completely different options.

For-profit employers can’t offer a 403(b) or a 457(b). Check your benefits portal or plan document for what yours actually offers.

The order to fill them

How much you can put in each account in 2026

Yearly limits for one person under 50, in the order to fill them after the match

IRS Notice 2025-67 and Rev. Proc. 2025-19. Under 50, before catch-ups. Your employer match goes on top of the 403(b) or 401(k) limit. Together that's $60,900 a year, about 62% of the median nurse's $97,550 pay, so the order matters.

1. Take the full employer match

   If your employer matches, contribute at least enough to get every dollar of it. A 4% match on $97,550 is $3,902 a year you’d otherwise leave on the table. Check the vesting schedule too: some matches only become yours after a few years on the job.

2. Clear high-rate debt and build a cushion

   Pay off credit cards and other expensive debt before you invest beyond the match. My take: anything charging more than about 8% gets paid down first. Student loans are a separate call, especially if you’re headed for Public Service Loan Forgiveness. PSLF and the 2026 loan changes.

   Keep 3 to 6 months of expenses in a high-yield savings account, so a car repair or a cut in hours doesn’t land on a credit card. What else to protect first.

3. Max out an HSA, if you can have one

   You can only contribute if you’re on an HSA-eligible high-deductible health plan, which in 2026 means a deductible of at least $1,700 for yourself or $3,400 for a family. The 2026 limits are $4,400 for self-only coverage and $8,750 for family coverage, plus $1,000 more at 55 and older. For 2027, the limits rise to $4,500 and $9,000.

   An HSA is the only account that’s tax-free going in, while it grows and coming out for medical costs. Contributions through your employer’s payroll usually skip Social Security and Medicare tax too (when they go through a cafeteria plan, the pre-tax benefits setup most employers use), which a 403(b) doesn’t. The money carries over every year, stays with you when you change jobs, and can be invested. Contributions stop once you enroll in Medicare.

   Two changes for 2026 help people who buy their own insurance: bronze and catastrophic plans available through the marketplace now count as HSA-eligible, and a direct primary care membership of up to $150 a month ($300 if it covers more than one person) no longer disqualifies you.

4. Fill your 403(b) or 401(k)

   The 2026 limit for your own contributions is $24,500. At 50 and older you can add $8,000 more, and at ages 60 to 63, $11,250 instead. That $24,500 is per person, not per job: if you work two W-2 jobs with two 403(b)s or 401(k)s, your contributions to all of them share one limit.

   Two rules worth knowing:

   • The hospital 15-year catch-up. If you’ve worked 15 or more years for the same hospital, home health agency or health and welfare agency and your 403(b) allows it, you may be able to add up to $3,000 a year, $15,000 lifetime. It only works if your past contributions there averaged under $5,000 a year, so ask your plan first.
   • Roth catch-ups for higher earners. If you earned more than $150,000 in Social Security wages from your employer the year before, your catch-up contributions generally have to go in as Roth starting in 2026. If your plan has no Roth option, you may not be able to make catch-ups at all.

   Look at your plan’s fund list. Some hospital 403(b)s still lean on annuity products with high fees. My take: pick the lowest-cost broad index fund on the menu, or a target-date fund, one fund that shifts its mix as you near retirement.

5. Add a Roth IRA, through the backdoor if you need to

   The 2026 limit is $7,500, plus $1,100 at 50 and older. You can contribute directly if your modified adjusted gross income (MAGI) is under $153,000 single or $242,000 married filing jointly. Above that, the amount you can put in shrinks until it hits zero at $168,000 single or $252,000 joint.

   Who needs the backdoor

   • NP and RN, married, both maxing 403(b)s: about $180,850, under $242,000Direct
   • CRNA, single, maxing a 403(b): about $212,090, over $168,000Backdoor

   Rough MAGI at median pay ($132,300 NP, $97,550 RN, $236,590 CRNA): pay minus pre-tax 403(b) contributions. Your real MAGI depends on the rest of your return.

   The backdoor Roth: put after-tax money into a traditional IRA, then convert it to a Roth. It’s allowed and widely used. The catch is the pro-rata rule. If you have pre-tax money in any traditional, SEP or SIMPLE IRA on December 31 of the year you convert, part of your conversion becomes taxable. Many people fix that by rolling old pre-tax IRA money into their 403(b) or 401(k) first, if the plan accepts it. You report the backdoor on Form 8606.

6. Use a 457(b), if you have one

   A 457(b) has its own $24,500 limit, separate from your 403(b). If your employer offers both, you can put up to $24,500 in each. But the two kinds of 457(b) are very different accounts. See the comparison below.

7. Open a solo 401(k) for 1099 income

   If you pick up PRN app shifts, locums or contract work, a solo 401(k) lets you shelter part of it. Your own contributions share the $24,500 limit with any 403(b) or 401(k), but not with a 457(b). The employer side, about 20% of your net self-employment earnings, is extra room. On $30,000 of side income with a maxed 403(b), that’s about $5,600 more.

   The total cap is $72,000 a year per plan, before catch-ups. More on 1099 taxes and the solo 401(k).

8. Invest the rest in a regular (taxable) brokerage account

   No limits, no rules on when you can take money out, and long-term gains are taxed at lower rates. For anyone retiring before 59½, this is often the money you live on first. My take: broad, low-cost index funds here too.

Government vs nonprofit 457(b)

Same name, different accounts. Here’s what changes.

Both types allow a special catch-up in the three years before the plan’s normal retirement age. A government plan won’t let you use it in the same year as the age-50 catch-up.

My take: a government 457(b) is one of the best accounts there is for retiring early, because you can take money out without the 10% penalty once you leave that job. If you plan to retire before 59½, it can make sense to fill it before the Roth IRA. A nonprofit 457(b) is a bet on your employer’s finances, so I’d fill it only after everything else above, and only at a financially strong hospital.

Roth or traditional?

Most 403(b)s and 401(k)s now offer both. Traditional lowers your taxes now; Roth means tax-free money later.

My take: here’s how I’d decide if you’re aiming to retire early.

• In the 10% or 12% bracket, often early in your career, Roth is a good deal. You lock in a low rate.
• In the 22% bracket or higher, traditional usually wins, because the years between retiring early and claiming Social Security are often low-income years when you can withdraw or convert at lower rates.
• On PSLF, traditional has a bonus: it lowers your adjusted gross income, which lowers income-driven payments like the Repayment Assistance Plan (RAP) and leaves more to be forgiven.

Splitting between the two is fine if you can’t decide. A mix gives you options later.

Can you get the money out before 59½?

Yes, more ways than most people think:

• Government 457(b): no 10% penalty after you leave that employer.
• The rule of 55: if you leave a job in the calendar year you turn 55 or later, that employer’s 403(b) or 401(k) can pay you without the 10% penalty. It doesn’t apply to IRAs.
• Roth IRA contributions can come out any time without tax or penalty. Earnings and converted money have extra rules.
• Taxable brokerage: available any time, which is why it matters so much for early retirement.

Income tax still applies to traditional money when it comes out. The point is avoiding the extra 10%.

FAQ

I’m an emergency physician, not a financial advisor, CPA or attorney. This is education, not personalized advice. Plan rules vary by employer, tax law changes, and your situation is different from the examples here. Talk to a professional before acting on anything you read.