Preparing for Retirement

Preparing for Retirement

Glenn DuPont, DDS offers advice to younger dentists about retirement, including the need to maximize pretax retirement contributions early, investing in a fee-for-service financial advisor and finding the right buyer for your practice. He says younger dentists “should be planning for retirement now . . . You need to be both financially and mentally ready to retire when the time comes.”

Meanwhile, Chris Salierno, DDS says the age of 55 is when a dentist should start evaluating a practice if wanting to retire at 65 – and the value in the practice must be actively sustained until then. Finally, Roger P. Levin, DDS takes a look at getting in better financial shape in the years ahead of retirement: “the financial choices you make now can have a huge impact later. The journey to retirement is long,” he writes.

Read More at Dental Ecomonics

Mergers Can be ‘Win-Win’ for Dental Practitioners

Mergers Can be ‘Win-Win’ for Dental Practitioners

Alan Clemens writes that a practice merger can be among the most important and potentially successful actions taken by dentists during their career. It can be a win-win situation for both the transitioning dentist who is looking to achieve a reduced workload or to move directly to retirement and for the acquiring practitioner who is seeking a larger practice and patient base, a higher after-tax income, and increased utilization and efficiency.

Separately, Vincent Cardillo, MBA, takes an indepth look at developing a solid foundation for growth for anyone wanting to evolve from a solo practice into a multilocation group practice, or dental service organization (DSO). He examines the need to determine a niche, choice of location, whether to buy an existing office or build from scratch, the importance of the naming process, and the how to inculcate a positive office culture.

Read More at Dentistry Today and Dental Economics

Will Economic Changes Delay Retirement?

Will Economic Changes Delay Retirement?

Dr. Roger P. Levin, DDS, considers whether recent changes in the U.S. economy will delay dentists’ decisions to retire. He notes that the latest Dental Economics-Levin Group Annual Practice Survey found that more than a third of general practice owners (35%) said they are delaying their retirement due to changes in the economy. Dr. Levin argues that while the overall economy appears to have bounced back from the post-2008 recession, the new dental economy is another matter for many in the profession. He contends that there is more competition, fewer adult patients, and changing consumer notions about the need for twice-yearly hygiene appointments.

Dr. Levin moves on to look in detail at two specific types of practice owner – on target for retirement vs delayed retirement. The two groups of practice owners had both obvious and expected differences, says Dr. Levin. The practices of the on-target group enjoyed increases to revenue and active patients in far greater numbers, while experiencing far less stress than their counterparts. In conclusion, Dr. Levin advises all dentists – no matter what category they fall in – to work with a certified financial planner throughout their careers.

Read more at Dental Economics

The Benefits of Cash Balance Plans for Dentists

The Benefits of Cash Balance Plans for Dentists

Dentistry iQ’s Zachary Kulsrud takes a look at accelerating retirement savings through a cash balance plan – a type of defined benefit plan that allows for more pre-tax retirement savings than 401(k) plans, along with additional benefits.

A growing number of dental practice owners find that retirement planning based on a 401(k) or profit-sharing plan alone is not giving them enough savings for retirement. While the maximum contribution in a 401(k) profit-sharing plan is $59,000 a year, contributions to cash balance plans can approach $250,000 a year for dentists who are near retirement. Meanwhile, Dentistry iQ’s Will Parrish outlines guidance for retirement planning, concluding that “Nothing can compare to a well-orchestrated financial plan that involves your attorney, tax advisor, and experienced financial advisor. Many dentists have all of the parts of a plan, but many are unsure how all those parts work together.

Read More at Dentistry IQ

Practice Ownership is Declining Among Dentists

New research indicates private practice ownership for dentists is steadily declining among all age groups – and is especially falling among younger dentists. The demographic with the biggest decline in practice ownership was dentists age 35 and under: 44% were practice owners in 2005, compared with 38.2% in 2015. Dentists aged between 35-44 registered the second-biggest decline: 83.4% owned practices in 2005, against 78.7% in 2015. Meanwhile, the proportion of dentists aged 55-64 who own practices fell to 92.3% in 2015 from 93.8% in 2005. Marko Vujicic, Ph.D., chief economist and vice president of the ADA Health Policy Institute, says the trends will continue.

Read more at ADA News

Maximizing Value When Selling a Practice

Dentistry iQ details a number of strategies and money-saving insights to help maximize the value of a dental practice upon sale, underscoring the importance of recognizing that a practice is not taxed as one entity but contains several different kinds of assets including equipment, supplies, real estate, practice goodwill and patient records. Each practice asset necessitates discrete accounting and tax rules because the IRS has established different depreciation and time factors for each one.

Read more on Dentistry iQ

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