We receive many questions from new dentists about whether they should save for retirement or pay off existing student loans. While each situation is unique, we do always try to accommodate early retirement saving as much as possible. If you start early, you not only get in the good habit of contributing toward savings and retirement, but you have so many years for your contributions to grow. With that said, many new dentists are unsure of their options to save for retirement. Here are some of these options.
How long do you plan on practicing dentistry? Although we haven’t officially started our careers as licensed dentists yet, it is never too early to plan ahead for retirement. Saving your hard-earned money as a dentist after graduation doesn’t seem as glamorous as treating yourself, but saving and investing will allow you to have more control and freedom later in life. The futures of Social Security, tax rates, inflation, and the economy are uncertain, but the one thing you can control is your savings.
When you get your first job, there is a good chance that you are going to have to make some decisions about participating in a retirement plan right away. In some cases that decision will be made for you. If you go to work for a corporate dental office, there is a pretty good chance you will end up with the option of a 401k. 401k Retirement plans are less common in smaller and private practices, but it would still be beneficial to have a basic understanding as one will likely be recommended to you at some point in your career. One other thing to keep in mind is that you could also end up working as an independent contractor, in which case you would not be able to participate in the employer’s retirement plan although you could set up your own. There are other types of retirement plans but for the sake of brevity, we will focus on the 401k. Here are some things you need to know.