How Much Money Will I Need To Retire From My Dental Practice?

Money Needed for Retirement

This is a question we hear quite a bit, and the answer is easy to give. You first need to ask yourself one important question – what am I currently spending?

The fist step in calculating what your retirement savings should be is to know exactly how much money you currently spend and what it’s going towards. Because of this, the answer to the question “how much money will I need to retire” will be different for every single dentist. Avoiding calculating the actual numbers is one of the biggest mistakes a dentist can make.

Many dentists assume that they can just make rough estimation of a retirement budget, but this is ill advised. This method doesn’t take into account any large, out-of-the-ordinary expenses such as vehicle purchases, vacation spending, or any emergencies that may come up. It’s been recommended that you track your spending over a three-year period to get the most accurate measure of how much money you’re actually spending.

Once you realize that your future spending should be mostly the same as your current spending, you’ll be able to calculate how much money you’ll need to save in order to retire comfortably. The simplest way to find this number is to times your annual spending by 20 or 30, depending on your age. If you’re retiring earlier, you’ll need to add more years, if you’re retiring later in life, you can subtract a few years.

It will be a challenge, but dentistry is a profession in which you can feasibly accumulate up to 30 times your annual spending. The trick is to start early, plan careful and watch your personal spending. For more tips on retirement, selling your dental practice or any other dental transitions, please contact CTC Associates.

Posted on Jan 21, 2016
Image Credit: File ID 2562817 | © Scott Hancock | Dreamstime.com

Share:

Archive

May 9, 2022, 11:41 AM
Even though acquiring a dental practice is one of the most effective ways to grow your business, it comes with its fair share…
Apr 25, 2022, 11:12 AM
Confused if you should purchase a dental practice or start a new one? Here is a guide to help you out!
Apr 12, 2022, 6:30 PM
Where some joint-venture businesses work very well, others might not. So, if you are thinking about adding an associate to…
Mar 28, 2022, 10:11 PM
You achieved your life-long dream of starting your own dental practice. You worked hard to set up the foundation. You created…
Mar 14, 2022, 8:02 PM
Selling your dental practice is a huge decision, and most people aren't aware of the best time to do it. If you've built your…