How To Determine When To Call A Dental Retirement Plan Administrator?

Don’t Miss The October 1 Deadline

Dental Retirement Plan - Dental CPA

If you haven’t made time to speak with a retirement plan specialist recently to make sure that your retirement plan still addresses your company’s unique needs, there’s a chance you are missing out on a more cost-effective solution. Your retirement plan team can quickly run some illustrative numbers to compare your SEP against a 401(k) plan to reveal whether a better option exists for your business.

Do you provide your practice’s staff with a SIMPLE IRA or Safe Harbor 401(k) plan? Well, time’s running out to make changes to your existing plan or establish a new one. The deadline to make changes or establish your dental practice’s retirement plan is Oct. 1, so if you haven’t already, consider touching base with your dental retirement plan services team. Not only will they help you meet the deadline, they can take a look at your existing plan to make sure it has been optimized to deliver maximum results.

Your Dental Practice’s Retirement Plan Is A Powerful Tool

Have you taken the time to really understand the value a great retirement plan design can be for your practice? Here are six reasons why you may want to pick up the phone and call your retirement professional as soon as possible.

Read: Put Together An Amazing Dental Advisory Team

Six Reasons To Call Your Dental Retirement Plan Administrator

  1. You have no retirement plan at all. Offering your staff a retirement plan is more than just a great recruitment tool; it’s an excellent way to make your dental practice’s profits go further. Check out Retirement Plan Design: One Size Does Not Fit All for more insight into how a retirement plan can help bolster your practice’s growth strategy.
  2. You have a SEP Plan with more than two employees. If you haven’t made time to speak with a dental retirement plan specialist recently to make sure that your plan still addresses your practice’s unique needs, there’s a chance you are missing out on a more cost-effective solution. Your dental retirement plan team can quickly run some illustrative numbers to compare your SEP against a 401(k) plan to reveal whether a better option exists for your business.
  3. You are a business owner who is able to maximize deferrals every year with a SIMPLE IRA. If so, it may be time to consider a safe harbor 401(k) plan in 2016 for additional tax deferral. For more insight into how this option can work for you, take a look at Safe Harbor 401(k) Plans Provide Smooth Sailing.
  4. You have a 401(k) but receive corrective distributions every year. You may be missing out on a retirement plan design that can not only alleviate this problem, but can help you maximize the benefits your practice receives for being active participants in your staff’s retirement strategy. Access Safe Harbor FAQ here.
  5. You maximize deferrals every year under your Safe Harbor 401(k) plan but offer no profit sharing option. A better plan design for dental practice owners in this situation might be to maximize profit sharing contributions while limiting the amount that has to be provided to staff. For example, cross-tested profit sharing plans may save you money if your practice’s staff consists primarily of younger employees.
  6. You are maxing out your profit sharing plan every year. It’s time to add a cash balance option to your existing retirement plan. This is a great option for practice owners in this position, because it allows for much higher employer contribution deductibles for owners. Click here to learn more about how these plans can help your business.

Take control of your retirement plan today. Email dental retirement plan expert to find out what you have been missing.

By Steve Renner, QKA (New Philadelphia office) 

This article was originally published on Dear Drebit – Rea & Associate’s official blog. Bright Dental CPAs is the dental services division of Rea & Associates.

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What To Expect From Your Career In Dentistry

Dental Career Planning - Dental CPA

Your school debt is almost paid, your practice is busy and, for all intents and purposes, successful, and you are now at a point in your career where you are beginning to build equity in your practice. This is truly a great moment for you as a professional and as a dental practitioner. But be forewarned. At this point in your career, you are likely making some serious money – which means you are probably itching to spend a little (or a lot) of it. This is the fork in the road that will determine much of your future happiness.

Owning a dental practice can be very rewarding as long as you remember that you’re entering an endurance race – not a sprint. So, if you’re looking for a “get rich quick” scenario, opening a dental practice is probably not for you. If you want a fulfilling career that, albeit challenging, can be incredibly fulfilling, read on.

Getting to know the four stages of a typical dental career will help you measure your own success and will help motivate you to make the best choices for your practice, especially during the first few years. And don’t forget to download The Business Side of Dentistry: Tips and Tools for Dentists for more insight into the dental profession.

The Dental Practice Career Cycle

  1. Slow And Steady Wins The Race

Owning a dental practice is just like owning any other small business. You must be mindful of all your new entrepreneurial responsibilities. Managing employees, establishing internal controls, negotiating with vendors and even generating a marketing plan are essential to running a productive and successful business. Unlike your friends who opted to pursue MBAs, your background in these disciplines is limited. It’s also likely that you will find yourself at an economic disadvantage because, unlike your business school cohorts, you have astronomical debt.

Read: Dentistry: It’s Not All White Coats and Drills

The American Student Dental Association states that, according to the American Dental Education Association, the average dental student graduates with upwards of $241,000 of student loan debt. This total has not only increased more than 66 percent in the last decade, it greatly exceeds the average student loan debt nationwide. Therefore, as nice as it would be to spend your paycheck on luxury items, avoid the temptation. Your long-term success will be measured by how well and how quickly you can pay down your debt. Get started as soon as possible. It will be worth it.

  1. Build A Solid Foundation With A Sound Financial Plan

Your school debt is almost paid, your practice is busy and, for all intents and purposes, successful, and you are now at a point in your career where you are beginning to build equity in your practice. This is truly a great moment for you as a professional and as a dental practitioner. But be forewarned. At this point in your career, you are likely making some serious money – which means you are probably itching to spend a little (or a lot) of it. This is the fork in the road that will determine much of your future happiness.

You can either choose to spend it on vacations, homes, cars and the like, or you can start developing saving habits that will set you up for later in life. Frankly, this is an optimal time to develop a financial plan and start putting a set amount of money into a retirement instrument every month. Whether it’s a stock portfolio or a 401(k), developing a steady financial plan is critical. That’s not to say that you can’t buy some really nice things along the way – just make sure you have a nice nest egg waiting for you when you are ready to start your retirement.

  1. Put The Pedal To The Metal

There comes a time, usually in your early to mid-50s, when the kids are through school, your business and student loans are paid off, you are paying for equipment upgrades from your cash flow and your financial plan is beginning to bear fruit. This is the point on your career timeline where you set your sights on what you want out of retirement and revise your plan to make sure it happens.

There are things to consider at this point in your life and there are tools to help you make informed decisions. At this stage, many dentists find themselves yearning for more control over their free time and less pressure at work. They aren’t yet ready to retire, but would love to slow down and smell some of the roses they’ve planted. Working with a business valuation or succession planning professional can help you streamline your future goals while ensuring that there will be no major surprises along the way.

  1. You’ve Worked Hard, It’s Now Time To Play Hard

It’s been a long, exciting road – but you wouldn’t have had it any other way. As we round the corner to stage four of your career as a dental practice owner, you can finally sit back and relax. If you took the time to plan ahead, your mind, body, spirit and bank account are ready. Now the only thing left to do is to pass the torch to a good, young dentist and take your leave. You’ve earned it.

Have questions? Email the Bright Dental CPAs at Rea & Associates for answers. And don’t forget to download your free copy of The Business Side of Dentistry: Tips and Tools for Dentists and get to know more about what you will encounter as a new dental practice owner.

By Ryan Dumermuth, CPA, CFP (Mentor office)

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