Can Resident Doctors Get 401(k) Matching While Paying Student Loans?

Most residents I talk to are making a decision that feels obvious: pay down student loans first, invest later.

I get it. You're staring at $200K, $300K, sometimes $400K in debt. The last thing you want to think about is retirement. You want that number to go down.

But here's what nobody told you: you may be leaving free money on the table every single month.

What Changed With SECURE 2.0

In 2022, Congress passed the SECURE 2.0 Act. One of the provisions inside it changed physician financial planning in a way that almost nobody is talking about.

Starting in 2024, employers can treat your qualified student loan payments as if they were 401(k) contributions. What that means in plain language: if your hospital offers a 401(k) match, and you're making student loan payments instead of contributing to the plan, your employer can still match you.

You're paying your loans. They're putting money in your retirement account. At the same time.

According to the Employee Benefit Research Institute, roughly 40% of workers with student debt reduce or stop retirement contributions because of that debt. For residents, that number is almost certainly higher. SECURE 2.0 was designed exactly for this situation.

Why This Matters for Residents Specifically

Residency is the financial window most doctors never get back.

You're making less than you will at any other point in your career, right? But you're also in a lower tax bracket than you'll ever be again once you hit attending income. That gap matters.

If your hospital or health system has adopted this benefit and you're not using it, you're missing out on employer contributions that could compound for 30-plus years. A $3,000 match today, invested from age 28, is not $3,000 by retirement. It's a very different number.

You got to be smart about the window you're in.

Does Your Employer Actually Offer This?

This is where you have to do a little work.

SECURE 2.0 allows employers to offer this benefit. It doesn't require them to. As of 2024, many large health systems are still in the process of updating their plans. Some have rolled it out quietly.

Here's what I'd do:

Go to your HR department or benefits portal and ask specifically about "student loan matching" under SECURE 2.0
Find out if your plan has been updated and when
Ask what loans qualify (generally, federal and private loans for qualified education expenses)
Find out what documentation they need to start applying payments toward your match

If your employer hasn't adopted it yet, it's worth asking. A lot of residents don't realize they can surface this to their benefits team, and sometimes just asking puts it on someone's radar.

How Do Physicians Build Wealth Differently?

This is a question I hear a lot, and realistically the answer comes down to a few things.

Physicians start later. The average attending is 30 to 33 years old before they see their first real paycheck. That's a decade of compounding you don't get back.

Physicians also carry more debt than almost any other profession. According to the AAMC, the median medical school debt for 2023 graduates was $200,000. For residents trying to figure out physician financial planning, that debt is the first thing they see.

So the wealth-building playbook has to account for both. You can't just apply generic financial advice to a doctor's situation. The debt is real, the late start is real, and the income jump when you finish training is also real.

The moves that matter most, in order:

First, figure out what your hospital offers. Student loan match, 403(b) match, employer retirement contributions. These are dollars you're either capturing or walking away from.

Second, lock in your disability insurance during residency. Not after. I've said this before and I'll keep saying it. You're younger, you're generally healthier, and the premiums are lower. Once you're an attending with a higher income and more wear on the body from training, that coverage gets more expensive. Get it now.

Third, if you're in a public health system, understand your PSLF situation. The Public Service Loan Forgiveness program has been unreliable historically, but it has improved. If you're at a qualifying nonprofit hospital, those years of residency payments are counting toward forgiveness. Don't ignore that.

Why Do Many Doctors Go Broke?

I don't like the framing of that question because it makes it sound like a character flaw. It's not.

What happens to a lot of physicians is a timing problem.

You come out of residency, you've been living on $60,000 a year for four or five years, and suddenly you're making $300K or $400K. The lifestyle shift feels earned. And it is, to a point.

But the student loans are still there. And if nobody helped you build the financial structure before the income came in, you're spending at attending income with resident-era planning. That's how you end up working until 68 when you planned to retire at 60.

It's not about doctors being bad with money. It's about the system not equipping them for this specific transition.

What's the Best Retirement Plan for Physicians?

The honest answer is it depends on where you are in your career.

As a resident, you're focused on capturing any employer match available, including the new student loan match provision if your plan offers it. You're looking at a Roth IRA if you're under the income limit (residents usually are). You're thinking about HSA contributions if you're on a high-deductible health plan.

As an attending, the picture gets more complex. A 403(b) or 401(k) at max contribution, a backdoor Roth IRA if you're above income limits, a defined benefit plan if you're in private practice or 1099. The tax planning around those contributions matters a lot.

The specifics of your situation, your employment structure, your debt load, your timeline, that determines the order of operations. But the foundation is the same: capture free money first, protect your income second, then invest in the right accounts in the right order.

The Simple Version

Most residents I talk to are doing one of two things: trying to throw every extra dollar at loans, or ignoring everything until residency is over.

Neither is quite right.

You don't need to have it all figured out. But you do need to know what your employer offers, protect your income with disability insurance while you're still young and healthy, and make sure you're not walking away from matches that are sitting there waiting for you.

The SECURE 2.0 student loan match is a real thing now. It's worth 20 minutes to find out if your hospital has adopted it.

That's not complicated. It's actually pretty simple. It's about implementing and doing it.

Source: AAMC 2023 Medical School Debt Report

FAQ

Does SECURE 2.0 student loan matching apply to all residents?

It applies to employees whose employers have updated their 401(k) or 403(b) plans to include this provision. It is not automatic. You need to check with your HR or benefits department to see if your hospital has adopted it.

What student loans qualify for the 401(k) match under SECURE 2.0?

Generally, qualified education loans as defined by the IRS. That includes most federal student loans and many private loans used for tuition and education expenses. Your plan documents will specify what qualifies.

Should I pause student loan payments to contribute to my 401(k) instead?

Not necessarily. With the student loan match, you may be able to get the employer contribution while continuing to pay loans. Run the numbers on both scenarios. If your employer has adopted the benefit, making loan payments could give you the match without redirecting cash flow.

When should I start investing as a resident?

As early as your cash flow allows, even if it is a small amount. The primary goal in residency is to capture any employer match available, protect your income with disability insurance, and not over-optimize for loan payoff at the expense of free employer money.

What is the best retirement account for resident physicians?

Start with whatever captures your employer match. If you have leftover savings capacity and your income is under the Roth IRA limit (which most residents are), a Roth IRA is strong. The tax-free growth over a 30-year career is hard to beat when you are in a low bracket now.