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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Social Security Considerations for Dentists

Social Security for DentistsDentists, like all Americans, have many things to consider when making plans for Social Security. Often, you have more questions than answers…

…When is a good time to start receiving benefits?

…Should you work at your dental practice and collect Social Security at the same time?

…Are there benefits to waiting until after your full age of retirement to start collecting your Social Security?

Retirement Planning + Social Security

The questions can go on and on and the answers vary by person. However, the following are some important things to consider when thinking about what is right for you. And these are good tips to share with other employees at your dental practice.

1) Other Sources of Income. If you are a younger dentist, you should probably count on other sources of retirement income. Social Security funds are diminishing every year and could be gone by the time you retire.

2) Claiming Early. If you’re a dentist that is approaching age 62, you should consider when it is most appropriate to claim the benefits. If you were born between 1943 and 1954, your full retirement age is 66, but you have the option to start receiving benefits at a reduced rate at age 62. Claiming benefits early generally makes sense only if you are strapped for cash or you do not expect to live much longer.

3) Collecting and Working. If you claim benefits before your full retirement age, they will be further reduced if you are still working at your dental practice or any job. The reductions apply if you receive income in excess of $15,120 a year. Do you plan to work beyond age 62? If so, you should consider delaying your Social Security benefits until at least age 66, (or your full retirement age.

4) Longer Life Expectancy. You could also consider waiting until the age of 70 to start receiving Social Security. By doing so, you could substantially increase your benefits received over the remainder of your life. If you believe you will have a longer life expectancy, this may be the option for you.

5) Don’t Wait Past 70. There is no benefit to waiting beyond the age of 70 to claim your benefits. No matter what, begin collecting when you hit 70.

6) Children and Retirement. Are you thinking of having a child (or adopting) in your retirement years? If so, your children would receive benefits, too. This applies for children under the age of 18 as long as you are currently receiving Social Security.

7) Survivor Benefits. If your spouse passed away, you can begin receiving survivor benefits as early as age 60 at a reduced rate. Survivor benefits are 100 percent of a worker’s benefit starting at age 66.

8) Collecting on a Former Spouse. You can collect Social Security on your former husband or wife as long as you were married at least ten years, you are not currently married and you are both at least 62 years old.

9) Higher Earning Spouse. If you are married, chances are, as a practicing dentist, you may be the higher earning spouse, too. If so, you should delay benefits as long as possible as long as one of you is in good health and you are financially able to do so.

10)  Alternate Strategies. Consider other planning strategies like “file and suspend” or “file a restricted claim for spousal benefits only .” These may make sense depending on your marital status and work history.

Not sure which options are best for you? Do you have more questions about claiming Social Security? Contact Rea & Associates. Our team of adept and talented Dental CPAs can help you determine what is right for you and your dental practice.

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