Retiring

It almost seems like yesterday that you graduated from dental school.  You spent the next few decades growing your practice and investing in a retirement portfolio, knowing one day your hard-earned money would support you through your retirement.

Balance in retirement is important – not just finding a balance between spending too much money and being afraid to spend, but also how to spend time. How much alone time do you prefer? How much would you like to engage with friends, family, or former colleagues? What is the right blend of relaxing and being active for you? 

If you find the thought of taking retirement distributions stressful, you’re not alone.  Time after time our clients at Mission Financial Planning are surprised to find themselves struggling to dip into their retirement savings.

As I discuss estate planning with my clients, I inevitably think about my personal estate plan.  My kids will inherit what will seem like a lot of money to them, considering how frugally they were raised (downside of being brought up by a financial planner!).  I want them to manage it well, understand why I made the estate planning decisions I did, and I have some ideas about ways the

If you’re a practice owner with a 401k, Cash Value, or Profit Sharing Plan, now is the time to look at your employer contributions to the plan.  Defined benefit, discretionary matches, and profit sharing contributions are based on last year’s compensation numbers. 

As a Dental Practice Owner, you have a huge advantage over a typical employee in your ability to fund a retirement plan, and the tax benefits are significant.  "Uncle Sam" is helping you fund your retirement in the form of tax deductions.  

We love it when clients maximize investments in your tax-advantaged plans.  For 2020, some maximum contribution limits changed and others did not.  Here’s a quick listing of maximum contributions for various types of retirement plans:  

No change for 2020:

Investing in retirement takes a different approach than investing to build wealth. In retirement, investing for income becomes much more important.

If the 4% withdrawal rule was created with a 65 year old in mind, what happens when you want to retire earlier?  How much would an early retiree have to reduce their withdrawal rate to accommodate a longer retirement?  Research has been done that suggests that you don’t have to reduce the 4% withdrawal rate too dramatically, even for very young retirees.

A convenient truth of a 4% withdrawal rate in this market is that dividends and bond income will come pretty close to covering it. However, once you start withdrawing more than the income the portfolio can predictably produce,  you are relying on growth to fund your spending.