Dentistry is an extremely rewarding career path. It is also unique given that many who operate in the field are business owners, creating a responsibility for their own financial future, as well as, the livelihood of their staff, and the success of their practice. This dynamic compounds with issues of managing what are often times higher levels of debt, but provides opportunities to design and implement financial strategies with a higher degree of control.
Regardless of the chosen practice path, the income potential affords most dentists the ability to save at a significant rate, sometimes even creating scenarios for early retirement. With greater income one may experience additional tax challenges and often times asset protection concerns.
Our advisors believe planning can and should start early. Beginning the process while in training by starting to discuss personal and practice goals, and getting the framework for a plan put in place, can position one ahead of their peers. For many, student loans will present a challenge, and waiting until the exit interview to review balances and payment options will likely lead to a rushed repayment decision. Evaluating all repayment methods including loan forgiveness opportunities, conventional approaches, or private refinancing should all be considered and will certainly influence practice goals.
While in training, every dentist develops a distinct skill set, one that deserves protection should anything upend their ability to practice dentistry. At Finity Group, we believe it is important to review and secure disability insurance coverage that is built and designed to protect one’s unique occupation.
There may also be opportunities to begin building strong saving habits and taking steps to prepare for an individual’s more immediate financial goals, including home or practice ownership. One will have a chance to begin exploring benefits and retirement plan options, learning which will be available given their practice goals, and which a dentist may be responsible for developing within their personal plan.
Associate dentists will potentially be provided a host of benefits and access to a retirement plan. Benefit packages are never perfect and often times there are gaps that may be prudent to fill. There will be opportunities to compliment employer benefits and sometimes areas that require supplementing the employer offerings, which should be reviewed in conjunction with overall financial goals.
As one settles into their career, it’s important to continue reviewing one’s financial plan, making adjustments and changes as incomes grow and immediate term goals are met. Accelerating retirement planning, seeking to maximize employer plans, as well as, looking beyond to other available options, should be considered. It’s important also to keep disability coverage aligned with current earnings. As one starts a family or takes on a mortgage or other obligation, it will be necessary to review additional vessels of insurance planning including life insurance options. It’s also likely that additional tax or legal planning will become increasingly important at this stage.
If ownership is a goal, it’s never too early to begin speaking with lenders and meeting with tax advisors or attorneys to understand the acquisition/startup process. A Finity Group advisor can be instrumental during this stage, giving direction and ensuring the proper steps are being taken in the right order.
Practice ownership is a primary goal for many dentists that requires careful and thoughtful integration of personal planning efforts with the efforts for the business. In addition to balancing savings and investing for the household against student loans, a mortgage and other debt reduction efforts, owners are tasked with assuming and paying the debts associated with their business. Owners will need to develop benefit packages and retirement plans, balancing their personal goals with the needs of their employees. There will be a host of tax, legal, and insurance related issues to address as well.