Save. Plan. Retire.

Retirement Planning for Dentists

retirement planning for dentists

As far as retirement planning is concerned, there is no simple formula or milestone dollar figure you should have saved before hanging up your dental handpiece for good and welcoming the last patient into the operatory. Each clinician’s personal circumstances play a huge part in how much income is required during retirement – for instance, this can depend on factors like children and grandchildren as well as lifestyle goals now and in the future.

With careful planning and guidance, it is possible to meet your financial goals while still practicing as a dentist and during retirement. Working with an Altfest wealth management firm will increase your odds of reaching those retirement goals successfully.

As an initial step, consider setting up an employer-sponsored retirement plan such as a 401(k) or SIMPLE IRA as tax-deferred savings vehicles that offer tax deductions on contributions made and any earnings. Furthermore, those operating practices with 100 employees who each receive compensation of more than $5,000 may even benefit from start-up credits to offset expenses related to setting these plans up.

As soon as possible, start saving. Compound interest accumulated over time will exponentially grow the total amount you will have saved at the end of your career.

An HSA may also prove valuable for dentists. Contributions are tax deductible; growth on investments within an HSA grows tax deferred; withdrawals made for qualifying medical expenses are tax-free.

If you are at the early stages of considering retirement, it would be beneficial to meet with an advisor who can assist in setting realistic goals based on your current circumstances and desired timeline. They will also be able to develop an exit strategy from your practice that ensures enough money for a comfortable transition into retirement.

One of the greatest difficulties many dentists encounter when transitioning into retirement is both emotional and financial. After years devoted to their profession, creating relationships with both patients and colleagues while building an identity around their work, retiring may feel dauntingly complex at first. Dentists may struggle with understanding how they should transition out of a lifestyle that has long defined them.

That is why it is vital for clinicians to engage a wealth team who can guide them through the transition process – both while still in mid-career and when ready for retirement. This may involve anything from understanding their practice’s value and ways they could enhance it before selling, to devising an exit strategy that allows them to enjoy what matters most in retirement.