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The U.S. Retirement Crisis – Dentists Aren’t Immune

By Charles Cooke, CFP® and Haley Tolitsky, Financial Planner

News headlines have been spreading fear that Americans are not doing enough today to reach their retirement goals. According to the U.S. Global Investors survey, 65 percent of Americans have little or nothing saved for retirement. The number one reason why Americans aren’t saving is that they have too many other expenses. Dentists and their employees should be aware of this crisis in order to face the issues surrounding it, as well as to determine a resolution to avoid it.

It may be shocking to hear that a significant amount of our population does not have enough saved to cover a small emergency under $500 – let alone for retirement. Without first establishing an emergency fund, it is extremely difficult to consider, let alone consistently save for the future. A solid emergency fund should consist of 3-6 months of living expenses, depending on your current situation to cover unexpected financial obligations as they arise. 

As a dentist, your biggest concerns most likely include seeing patients and managing your successful practice. Regarding your personal life, your biggest financial worries might include managing your monthly cash flow and paying off debt, such as credit cards, student loans, a mortgage, car loans, etc. Referencing the chart from Money.com below, it is no surprise that reducing debt is a top priority for many individuals. Assuredly, there are proactive solutions to overcome these challenges, allowing you to reach your financial goals with confidence and peace of mind while also supporting your dental team.

SOURCE: Renzulli, Kerri Anne. “This Is How Much Debt the Average American Has Now-at Every Age.” Money. Meredith Corporation, April 13, 2018. 

Prioritizing Debt

While it is important to prioritize paying down debt, it is easy to push saving for retirement to the side, possibly until it is too late. This is risky because often dentists have to work longer to meet their retirement goals. According to the ADA, in 2017, the average age of retirement among dentists was 68.9, although back in 2001 their average retirement age was about 65.2.  When faced with considerable amounts of debt, it is crucial to create a debt reduction plan. 

  1.  Start with managing your monthly cash flow and establish a budget if you do not currently have one. 
  2.  If you have student loan debt, understand your loan repayment plan and make sure you are paying down interest and principal. There are different federal student loan repayment plans available and refinancing is also a viable option. 
  3.  And of course, pay off credit card debt as soon as possible. 

Savings and Retirement Plan Strategies

As you work to pay of your debt, it is just as imperative to start saving.  An ADA survey determined that dentists expect to live on an average of $127,000 per year when they enter into retirement. Unexpected changes in the economy, inadequate retirement savings, family needs, incomplete succession planning, and many other factors can force you to continue practicing past your expected retirement date. 

Dentists are not immune to needing funds from multiple channels in order to retire. As a practicing dentist, you may be inclined to have a net worth among the top 2% of Americans, or at least advancing towards those earnings. Discuss tax-saving strategies to put away as much as possible with your CPA and CERTIFIED FINANCIAL PLANNER™. If you are maxing out your retirement plan, consider additional savings strategies, such as implementing an individual brokerage account, HSA, and/or a cash balance plan. Diversifying your retirement strategy based upon what stage you are in of your career can help you maximize your full potential. Ensure your investment strategy and risk tolerance are aligned with your retirement goals. It is also beneficial to automate your savings and investment contributions. 

Additionally, it is essential to implement the correct retirement plan that fits your specific situation and office. Not only are you able to put away a significant amount of money and deduct contributions as a business expense, your employees are also given the opportunity to fund their retirement proactively. A study from Employee Benefits Research Institute found that more than 55,000,000 U.S. Workers do not even have access to a retirement plan. Workplace retirement plans allow employees a convenient and tax-advantageous solution to start or continue their retirement savings. Often times, employees would not invest without the option through their employer. 

If you already offer a retirement plan, encourage increased employee participation. Research the option of auto-enrollment and auto-escalation in your plan. Are your employees contributing at least enough to get the full match offered? Several studies have indicated that around 20% of Americans don’t take advantage of their 401(k) match. Your plan advisor should be willing to provide financial education to your team and meet individually with employees to determine the best investment strategy based on their individual risk tolerance. This helps bring awareness to the importance of saving and adds a benefit of working for your office – increasing employee retention, satisfaction and productivity. 

By offering a retirement plan and financial education to your practice, you not only are positively impacting the future lives of your employees, but you are also directly improving the current retirement crisis our country is facing. It is also just as important to ensure that you are taking the necessary steps to strengthen your own retirement strategy so that the crisis does not impact you. By working with a trusted team of experts, you can spend your time on what is important to you: your patients and your practice. By implementing the solutions listed above as needed, you can be set up for a successful and worry-free retirement! 


Charles Cooke, CFP®, is the founder of Cooke Capital, a wealth planning and investment management firm specializing in dental practices. Haley Tolitsky is a financial planner with Cooke Capital and candidate for CFP® certification.

Check the background of this firm/advisor on FINRA’s BrokerCheck.