Retirement Planning is Tricky for Dentists
Working with Dentists and Dental Practices, we have learned that many dentists have blinders when it comes to retirement planning. Most believe that once they have paid off their dental school loans and startup costs, they will have a cash cow that will generate enough to create a cache of investments for retirement. Or, they somehow believe there can be exponential growth for their practices in the future. Truth is, there are only so many hours in the day, so many chairs in the office and so many treatments that can be performed in a week.
Dental Practices are not like dropbox.com or Google where there are oodles of clients served that you never meet. Dentists build their practice patient by patient. That double-edged sword means that patients have a tremendous lifetime value and loyalty. But that comes with the corollary limitation to growth potential.
Dentists who believe they can sell their practice and clientele at the end of their working career for a pile of cash are too often surprised by the market value of their business. I have never seen a dentist who got more than they expected upon selling their practice. But there are plenty who were shocked at how little their business returned upon a sale.
We advise our dentists and dental practices to think about retirement savings early and to contribute to it like office rent: every month – whether it is a good month or not.
For more insight into how to run your dental practice with a vision for its long-term plan, contact us.