Retirement planning can be daunting for dentists. Are you saving enough? Have you explored your different options? But mainly, will you be prepared when the time arrives? Here are some helpful guidelines from an expert.
DENTISTS NEAR RETIREMENT HAVE A VARIETY OF CONCERNS:
• Have I saved enough?
• What will my retirement income be?
• Will I run out of money?
• How does selling my practice fit in?
• Is a 401(k) or an IRA my best or only option?
• What am I missing?
• How does all of the “stuff” I have fit together?
In my last two articles article about retirement plans for dentists, Retirement plans: Know your limits: Update on retirement plan options for dentists, and Retirement plans: Is a 401K the only option for dentists? I outlined a few of the basic retirement plan options dentists can consider for their practice, and the contribution limits for those options. What else should dentists be doing near retirement to improve their chances of success?
REMEMBER TO CONSULT WITH YOUR TAX ADVISOR and a qualified financial advisor before starting a retirement plan. The information in this article is a summary, and each plan has nuances that must be considered before choosing the one for you and your practice.
Take advantage of your maximums
The first step in reaching your retirement savings goal is to take full advantage of your current practice retirement plan (generally a 401k, or SIMPLE IRA) and if you do not have one, to start one now. A well-designed retirement plan can allow you to save anywhere from $12,500 to $18,000 of your own savings, plus potential matching and catch-up dollars. Add in a profit sharing component and the amount you could save could jump up as high as $59,000!
Not sure how much you should save? Check out this Retirement Income Calculator* to get started.