A Retirement Decision SCPMG Physicians Only Get to Make Once
You're three weeks into your new role at Southern California Permanente Medical Group (SCPMG). You're still figuring out the EMR, learning where the good coffee is, and trying to remember everyone's names. And then someone hands you a form and says you have 180 days to make a decision about your retirement.
You might fill it out in five minutes just to get it off your plate. Or you might set it aside and forget about it entirely until someone reminds you that the window is almost closed.
Here's the thing: That decision follows you for the rest of your career at SCPMG. And unlike most of the paperwork from your first few months on the job, this one can't be undone.
So let's talk about it.
What the Keogh Plan Actually Is
The SCPMG Keogh Plan is a pre-tax retirement savings plan available exclusively to Southern California Permanente Medical Group physicians. (Worth noting: This is specific to SCPMG. If you're with The Permanente Medical Group up north, this doesn't apply to you.)
Think of it like a second retirement savings lane running alongside your 401(k). The money comes out of your paycheck before taxes, it grows tax-deferred, and it's held in a Charles Schwab account with a solid lineup of low-cost Vanguard funds.
What makes it different from your 401(k)? The contribution ceiling. It's significantly higher, and that's the entire point.
Let’s Break Down the Numbers
The IRS puts a cap on how much you can put into defined contribution retirement plans in any single year. For 2026, that cap is $72,000.
Your 401(k) contributions count toward that number. So if you're putting $24,500 into your 401(k) this year, the 2026 employee deferral limit, you’ve got up to $47,500 left to direct into the Keogh, for a combined total of $72,000.
Not contributing to your 401(k)? Theoretically, you could put the full $72,000 into the Keogh. But there's a catch: The Keogh is also capped at 25% of your compensation. That means you'd need to be earning at least $288,000 to fully fund it on its own. (The IRS limits the compensation factored into that calculation to $360,000 for 2026.)
The simple version? Your 401(k) and Keogh share one bucket. The Keogh can fill whatever's left after your 401(k) contributions.
For a physician in a high tax bracket, that math adds up fast. We're talking about $40,000 to $47,000 a year in pre-tax contributions, growing tax-deferred over a 20- or 30-year career. That's not a rounding error. That's a meaningful difference in what you retire with.
The Part That Catches Physicians Off Guard
Here's what many people don't realize until it's too late: When you enroll, you choose a contribution level, currently 0%, 25%, 50%, 75%, or 100%. That percentage determines how much of your maximum allowable Keogh contribution gets deducted from your paycheck each year, but contributions don't actually begin until you make partner. You're making the decision now; the deductions start later.
And once you make that choice? It's locked.
You cannot change it later. Not during open enrollment. Not after you make partner. Not ever.
If you elect 0%, you've opted out permanently. If you elect 100%, you're committing to maximum contributions for your entire time at SCPMG.
We’ve seen physicians respond to this in a couple of ways. Some freeze up and fill in 0% just to get it off their desk. Others assume max is always the right answer and don't think twice about it. In our experience, both approaches can be mistakes, because the right number depends entirely on your full financial picture.
So, What’s the Right Percentage?
There's no universal answer here, but there are a few things worth thinking through.
If you're early in your career and carrying significant student loan debt, a new mortgage, or a growing family, committing to maximum contributions could create real cash flow pressure. A 100% election sounds great on paper until you're stretched thin every month trying to cover everything else.
On the flip side, if your loans are under control and you're already in a high tax bracket, deferring more money pre-tax could be a great financial move for you. Sheltering $40,000-plus from taxes every year while that money compounds over decades? That's hard to replicate with other strategies.
The conversation we'd encourage you to have, before you sign anything, is with a financial professional who can objectively look at your complete picture: your cash flow, your existing debt, your other savings, and your long-term goals. A fiduciary advisor, not someone selling you on one answer or the other.
A Few Other Things Worth Knowing
The rollover situation is worth understanding. Unlike most 401(k)s, rolling your Keogh into an IRA when you leave SCPMG is restricted under the plan documents. Some physicians who've left the group have run into this the hard way. Before you assume full portability, understand the distribution and rollover rules.
The investment menu is solid. The Vanguard institutional target-date funds in the Keogh have very low expense ratios, which matters more than most people realize. If you want a simple, diversified approach without a lot of maintenance, they can work well. If you want broader investment access, there's a Personal Choice Retirement Account (PCRA) option through Schwab, but it comes with added complexity.
Confirm the current details with your benefits department. Plan provisions can change, and the plan documents are the authoritative source on what applies to you.
Don't Let the Window Close Without Thinking This Through
We work specifically with Southern California Permanente Medical Group physicians at Evermont Wealth. We understand how the Keogh interacts with your 401(k), your pension, and the rest of your financial life, and we'd genuinely like to help you think through the election before it's finalized.
This is one of those forms that can look like routine paperwork but isn't. The decision you make once can shape what your retirement looks like decades from now.
We're independent, fee-only, and fiduciary. Our advice is always based on what's right for you, not what's easiest to recommend.
If you want to talk through it before you sign, we're here. Schedule a call at evermont.com or call us at (909) 296-7977.
Keep building your future.
This article was written in collaboration with artificial intelligence (Claude) derived from sources believed to be accurate. This article is for educational purposes only and does not constitute personalized financial, tax, or legal advice. Contribution limits and plan provisions are subject to change. Please verify the current SCPMG plan details with your benefits department and consult with a qualified financial advisor before making enrollment decisions.