Many dentists don’t focus on more than today. In the last two weeks, we’ve had four new clients enroll where the doctors were over age 63 with insufficient savings. They made the classic mistake of not funding savings or retirement plans until their children were out of college. Unfortunately, the perfect storm hit. Tuitions were due and the recession occurred. Their practices, like 75% of dental practices, were down between 7–16%. The ability of these doctors to fund their lifestyle was a huge challenge.
More doctors need to recognize that finding more effective ways to increase production, profit and referrals early in their career means their retirement won’t be fraught with anxiety. I always remember the old financial comparison: if a 20-year-old put away $2,000 a year for 10 years and then stopped and a 30-year-old put away $2,000 for 20 years and then stopped, the 30-year-old would never catch up to the 20-year-old in terms of savings. It’s an excellent life principle.
Unfortunately, these four doctors in their 60s, like many others, will now have to push harder and work years longer than they planned. Selling a practice as part of a retirement portfolio is an excellent strategy, but it’s only one strategy.
How prepared are you to retire with financial independence? How well are you doing with funding your savings and retirement plan?