factors that influence retirement decisionsBy: Joyce Kahng, DDS •April 29, 2023
According to multiple sources, the current average retirement age for dentists is 69 years old. The average American retires at about age 63. So, why do dentists retire later than most other working professionals? Do they just love teeth that much, or is there something more to this later-than-average retirement? Let’s go over some of the most common reasons that dentists retire later than the average American and how to better plan for retirement.
While many dentists make significantly more income than the average American, they also have to go into some serious debt for their job title. The average dental student takes on anywhere from $200,000-$400,000 in debt when they are done with school. This does not include loan interest that can easily add another $100,000. Yikes! Even with a higher-than-average income, it can take many years to pay back the student loan debt before they really start to see the income benefits of practicing. Then comes all the financial planning and balancing. One word of advice is to not get suffocated by the thought of your student debt. You made a serious sacrifice going to dental school but for a reason! Because you love dentistry and all it entails. It’s hard to look at the big numbers of student loans, but just remember it enabled you to become the dental professional you always dreamed of! Remember that when you are feeling stressed about the finances!
One of the thoughts behind the lack of savings for dentists is the accustomed lifestyle they live before retirement age is near. Once student debt is gone, many dentists have much more money than before, and now they can spend it; let’s be honest, it feels great! But remember the saying, “More money, more problems?” Many practicing dentists will happily spend their hard-earned money but not necessarily save as much as they should. Until retirement is around the corner, many practicing dentists don’t realize how much they’re spending. This is common for all careers as they grow their earning potential. Let’s be honest; it feels amazing to see your first big paycheck after years of hard work. Just remember to save a percentage of each one when possible, and don’t live above your means.
Many dentists truly love what they do and can often have a hard time leaving a career they are so used to being a part of. Being a dentist takes a lot of financial investment, time, and dedication to their patients. When your career is a part of who you are as a person, it can be difficult to put your dental handpieces away and say goodbye to a career you love. Let’s be honest, it’s bittersweet to retire from a career that made you into who you are, even if you have reached retirement age. Many dentists can struggle with a sense of self, and it keeps them practicing longer than the average American would in another career. Let’s just be thankful that dentists can love their career so much they actually are not looking forward to retirement. We will take this one as a positive; it’s hard to let go of the good!
While we know the initial investment in dental school is quite the steep price, there is another major cost coming your way: owning a dental practice. When a dentist owns their own practice, they must also pay for everything. This includes dental materials, salaries for staff which often include dental hygienists, dental assistants, front desk staff and a practice manager. All the materials, supplies, and PPE needed to run a practice can be a pretty penny. Dental insurance also plays a massive role in the high cost of dentistry, as many insurance companies do not reimburse dentists like we wish they did. Add on taxes, insurance, equipment repairs, a mortgage, and all the in-betweens, and the total overhead costs can be overwhelming and contribute to difficulty in saving money for retirement.
Like happy spending, many dentists are lacking in preparing for retirement. It’s easy to forget about retirement when you first graduate college and have a lifetime ahead of you. But the more you plan now, the better off you are in the future. Many dentists acquire an above-average lifestyle as they make more money, and the years roll on by! Research shows this is not just a trait of dentists. Many high-earning careers that make more income spend more of that income. It’s human nature to spend more! But that doesn’t mean you can be irresponsible about your savings. Planning for a comfortable and enjoyable retirement is crucial to financial responsibility.
Don’t try to do this alone. There are professionals that can help you prepare for your future financial concerns and better prepare you for when the time comes. If you are overwhelmed with student debt from dental school, starting a practice on your own may not be the best move right away. Practicing as an associate dentist can save you time, money, and lots of stress. Often associate dentists have more earning potential and much less debt. This can give you more time to think about what you want in your dental career. This is not to say you can never open your own practice. It does, however, give you time to plan if that’s what you want at some point in your career. Paying off dental student loans for a few years can give you more cushion if you decide to invest in owning a dental practice of your own someday.
If you are a new dentist, dental student, or future aspiring dentist, don’t let the retirement age scare you aware from a rewarding career! Like any job role, planning your financial strategies and savings will save you lots of money and stress. Don’t just go at it, hoping for the best. Plan, plan some more, and plan again! Your career and retirement savings will thank you!
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