First year solo practice, ~$1.5M revenue, targeting retirement 50. Does this plan hold up?
37, married, one young kid under 2. Solo surgical subspecialty practice. S corp, four staff, mostly cash-pay with some insurance work. Wife works part time at an outside W2 job and part time as the practice administrator, so she’s on both payrolls.
This is the first year of any meaningful income after training. Still remember having -$18 after rent and food was paid in med school. Residency was nearly break even. So started essentially from zero: before starting a practice, about $30K in retirement accounts and no taxable investments. Still renting because I can’t get a conventional mortgage until I have enough self-employment history as a solo owner.
Where things stand right now this far in the year: down payment for a house is fully saved and sitting in cash, $100K into taxable ETFs, and the 2026 tax bill is set aside. So the near-term obligations are covered and everything from here is incremental.
First full calendar year numbers
• Practice revenue: ~$1.5M
• Overhead: ~36%
• My W2: $185K
• Wife’s W2 from the practice: $78K
• K1 to me: ~$675K
• Household gross: ~$965K
• Net after tax and retirement contributions: ~$540K
The plan
Target retirement at 49 to 50. Family budget of $220K/yr while working, $180K/yr after. Both are on top of housing, and both assume no consumer or student debt, which should be true within a few years. The house will be on a 15-year note and pays off around age 53. I know health insurance from 50 to 65 isn’t in the $180K and needs its own line. Wife will drop the outside job in the next year or two and go full time at the practice.
Annual stack once fully built, roughly $322K/yr:
• Cash balance plan, both of us: $225K
• 401k deferrals, both: $53K
• Profit sharing and match, capped at 6% because of the CB plan: $19K
• Backdoor Roth, both: $16K
• HSA once we move to an HDHP: $9.5K
• Taxable ETFs: whatever is left, and the only thing funding the gap to 59.5
Other moving pieces over the next 3 years
• $1.3M house next spring, 15-year note, once I clear the self-employment seasoning requirement
• Cash balance plan launches next year
• $300K student loans at 6%, on RAP now
• Practice loan paid off (150k at 5.2%) within about three years
• Two short-term rentals, cost seg on both, STR loophole with real material participation logs. First one this fall, second one two years out
• Wife off the outside job, full time at the practice
• Switch to an HDHP and start the HSA
• 529 on track to $100K
Longer term: sell one rental at retirement, carry the mortgage on the other until 59.5, then pay it off and keep it as a cabin.
Questions
- Is leaning this hard on the cash balance plan the right call in my situation? It shelters roughly $150K a year more than a maxed 401k would, which is hard to argue with at my marginal rate. But it means about 90% of what I save is locked until 59.5, and retiring at 49 leaves a 10.5 year gap I have to fund entirely from taxable. Would you take the smaller deduction now in exchange for more reachable money later, or is that backwards?
- Any other small business tax strategies I am missing?
- Considering refinancing the $300K student loans to private after the house closes. No PSLF in play here, private practice the whole way. RAP sets my payment at 10% of AGI, which scales with every good year, and the unpaid interest waiver does nothing for me since my payment will cover the interest several times over. Physician refi quotes look like they land under my current 6%. Good move or bad move, and did anyone regret giving up the federal protections?