As a dental practice owner, you’ve spent years building something truly valuable. But are you fully maximizing one of the most powerful tools available to you - your retirement plan?
But first -
Hello! I'm Sharon.
I'm a financial planner for dentists. Whether you're starting to build wealth, growing your practice, or preparing for retirement, I work with dentists in Kansas City and across the country to create clear, confident financial plans. If you would like to talk about your goals at any stage of your career, let's set up a time to connect.
We’ve written these other blogs about finance for dentists that you may want to check out, by the way:
Financial Tips for Dental Practice Owners
Dentist Retirement: The Basics
A well-designed plan isn’t just a savings vehicle. It’s a strategy for building long-term wealth, rewarding your team, and reducing your tax burden. And with legislation like the SECURE Act 2.0 and the One Big Beautiful Bill Act (OBBBA), the rules and opportunities are evolving in your favor.
Here’s how to use your dental practice retirement plan as a foundation for financial freedom, personal planning, and a smooth transition into retirement.
No two dental practices are alike. Whether you're optimizing what you have or starting fresh, the right plan depends on your current goals, cash flow, and timeline.
1. Choose the Right Plan for Your Practice's Stage:
For Simplicity or Newer Practices:
- Starter 401(k) or SIMPLE IRAs offer low-cost ways to get started getting your own retirement funding started, allowing employee participation and providing tax savings.
For Growth and Higher Contributions:
- 401(k) with Profit Sharing allows for significant owner contributions—up to $77,500 annually if over 50 using catch-up contributions.
- Safe Harbor 401(k) plans remove certain compliance testing hurdles and ensure owners can maximize contributions regardless of employee participation.
- Traditional and Roth 401(k) options give you flexibility depending on whether you want the tax benefit now or later.
For Owners Nearing Retirement:
- Cash Balance Plans (often layered with a 401(k)) are designed for high-contribution years late in your career, often allowing over $100,000 in annual pre-tax contributions. These are powerful tools for last-phase wealth building and tax reduction.
For Culture and Team Engagement:
- Profit-Sharing Plans offer flexibility to reward employees based on performance and profitability, while also adding to their retirement savings.
2. Retirement Plans Are More Than Just Financial
Your retirement plan can serve as a recruiting and retention tool, improve team morale, and reinforce a culture of long-term thinking.
- Attract and retain top talent with competitive benefits
- Strengthen loyalty by showing a long-term investment in your team’s future
- Enhance your brand as a desirable place to work in a tight labor market
When employees see that you’re planning for their future, they’re more likely to stay engaged in helping build yours.
3. Take Action to Optimize What You Have
Whether you’re launching a plan or already have one in place, regular review and adjustment are essential:
- Evaluate current plan performance and whether it's meeting your goals
- Run tests with a third-party administrator to explore potential staff-cost savings
- Work with a financial planner to model contributions, tax impacts, and long-term projections
The right strategy should evolve with your dental practice, especially as retirement draws closer.
A Financial Plan is the Basis for Retirement Decisions
You’ve worked hard to build a successful dental practice - something that supports your family, your team, and your patients. But if your retirement plan isn’t keeping pace with your success, you may be leaving money, flexibility, and peace of mind on the table.
Maximizing your practice’s retirement plan is about far more than hitting an annual contribution limit or checking a compliance box. It’s about aligning your business with your long-term personal goals - whether that means reducing your tax liability, creating a reliable exit strategy, or building wealth outside your practice so you can retire on your terms.
When done right, your retirement plan becomes a multi-purpose tool, and with the recent updates from the SECURE Act 2.0 and the One Big Beautiful Bill Act, the financial planning landscape is shifting to favor owners who are proactive and informed.
So, whether you’re five years from retirement or still building toward it, now is the time to review, refine, and realign your plan. This isn’t just about saving more - it’s about making smarter, more confident decisions with the business you’ve built and the future you want.
Ready to Get Started?
Thanks for reading our blog about maximizing your retirement plan. If you'd like to talk about what financial planning looks like as a new dentist, a growing practice owner, or a dentist transitioning to retirement, contact us to set up a time to talk.
Disclaimer
IRS CIRCULAR 230 DISCLOSURE
In compliance with requirements imposed by the IRS pursuant to IRS Circular 230, we inform you that any U.S. tax advice above is for informational purposes not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.