Dentists have specific needs when it comes to their finances. We’ve been financial advisors to many medical professionals and address medical professionals and dentists in three stages during their careers. Having a relationship with a Modera advisor can help to secure your financial wellbeing during any stage of your career.
Stage One – Just Out of School
Dentistry takes a lot of time and dedication to education. Dentistry degrees start with a four-year undergraduate degree, then continue to an additional four years of dental school. If you specialize, it requires even more training. That being said, the payoff is often worth it. Annual salaries for general dentists average over $200,000, and specialists average more than $300,000. It’s a fantastic way to start your career, but there are often caveats.
While starting your career, you might also want to start your life. You’ve just spent the past eight years as a student, and you may be in a relationship or even have children. You either recently purchased a home or are planning to. You want a nice car and your own practice. You’re improving your hand speed and getting a sense for the business of running a dental practice, but like many other dental students, you have amassed quite a bit of student loan debt. Your income-based student loan payments have become non-deductible, meaning you’re making full payments.
While your income goes up, the large paycheck makes it tempting to take out a large mortgage or buy a nice car, but be cautious. If your career is still young and you have a large amount of student loan debt, you should commit to building your practice and wiping out your student loans.
Areas to focus on in Stage One
- Managing spending
- Avoiding non-productive debt
- Improving your practice and learning the dental business
- Saving and investing
Stage Two – Close to a Decade In
After about a decade in your dental career, you’ve reached professional maturity. Your solo practice may be well established, or you’re otherwise satisfied with your career choices. You may have purchased a house and luxury car. Your loans are likely satisfied or nearly satisfied, and you’re accruing wealth.
This stage in your career will likely last the next twenty years. Continue building wealth and paying off debt, building on the foundations you’ve laid in stage one.
Areas to focus on in stage two
- Debt payoff of dental practice, equipment, and student loans
- Continuing to build your personal wealth
- Setting financial goals annually
- Reviewing, analyzing and monitoring areas of tax, insurance, estate planning, retirement projections and investments regularly
Stage Three- Financial Freedom
Finally, you’ve reached the pinnacle of your career. You continue to work in your practice, but you may be preparing it for sale and need assistance in getting the most post-tax money possible. With children out of the nest, you may be considering downsizing your home and paying off any old debt.
Areas to focus on in stage three
- Finalize any late-stage pre-retirement goals
- Assessing your cash flow needs in retirement
- Selling your dental practice
- Determining whether you will continue to work in your retirement
How Modera’s financial advice can help.
You’re an expert at running your dental practice, but you may not know how to optimize your practice to ensure it serves you financially for years to come. Modera is aware of the unique financial considerations that come with dental practice and has financial advisers with specific experience in managing the finances of dental professionals.
No matter the stage of your career, Modera can help. Whether you are just establishing your career, or are ready to sell your dental practice and retire successfully, we can help you form a collaborative financial team, working closely together to keep you on track through whatever stage in your career you’re in.
It’s also important to note that we operate as fiduciaries, always putting your interests first, and work on a fee-only basis, much of which may be tax-deductible.
Information sourced from Modera’s Financial Advisors in Atlanta, GA.
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