A magnetic memory device includes a magnetic memory stack including a bottom electrode and having a hard mask formed thereon. An encapsulation layer is formed over sides of the magnetic memory stack and has a thickness adjacent to the sides formed on the bottom electrode. A dielectric material is formed over the encapsulation layer and is removed from over the hard mask and gapped apart from the encapsulation layer on the sides of the magnetic memory stack to form trenches between the dielectric material and the encapsulation layer at the sides of the magnetic memory stack. A top electrode is formed over the hard mask and in the trenches such that the top electrode is spaced apart from the bottom electrode by at least the thickness.