Why Ophthalmologists and Other High-Earning Specialists Are Combining Two Plans to Shelter Over $100,000 a Year

"A Solo 401(k) allows a self‑employed individual to contribute in two roles simultaneously: as an employee and as the employer. In 2026, the employee deferral limit is $23,500, with an additional $7,500 catch‑up for those 50 and older."

"A defined benefit (DB) pension plan is actuarially funded, meaning the annual contribution is calculated to deliver a specific retirement benefit by a target age. A solo practitioner in their mid‑50s earning $500,000 annually can simultaneously fund a DB plan based on actuarial calculations."

"At age 55, the cash balance contribution limit in a combined structure can reach $262,000 for the DB component alone, with a combined plan total approaching $342,000 when stacked with a 401(k)."

"The actuarial math behind defined benefit plans favors older business owners. Because there are fewer years to fund the target benefit before retirement, older individuals can contribute more."

A self-employed ophthalmologist can shelter significant income from taxes using a Solo 401(k) and a defined benefit pension plan. The Solo 401(k) allows contributions as both employee and employer, with limits reaching $76,500 for those over 50. A defined benefit plan can add $80,000 to $175,000 in pre-tax contributions annually, depending on age and income. For those aged 55, combined contributions can total approximately $342,000. The structure benefits older business owners due to fewer years to fund the target retirement benefit.

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