Many people dream of retirement, fantasizing about the day they can finally stop working and start doing exactly what they want. It sounds amazing! But transitioning from work to retirement can be unexpectedly difficult. This is especially true if you’ve worked your entire adult life in a field you’re passionate about, which is the case for most of our dentist clients.
We’ve found that having the right approach to savings during your working years and the right plan for your financial future can help ease this transition.
Why Retiring Can Be Challenging
If you’re a dentist who loves your work, you might find it challenging to step back from a career (and perhaps a practice) you’ve built over decades. People often miss the structure of a schedule, the camaraderie, and the sense of purpose work brings.
Another big change is a sudden drop in income. After years of money steadily flowing in, retirement often brings this steady flow to a drip.
The unfortunate truth is that, according to a 2010 report from the American Dental Association, most dentists take a pay cut that equals 50% of their pre-retirement income. Only 5% of dentists are positioned to retire “comfortably,” according to the report. A pay cut of this magnitude could mean substantially changing your day-to-day lifestyle or even giving up some dreams you had for retirement, like taking that round-the-world trip.
The good news is that you don’t have to accept average. You can be one of the 5%.
How to Ease the Transition from Career to Retirement
We’ve found that planning for a financial future where retirement income is 100% of pre-retirement income is an excellent way to help our clients make the life-changing transition from career to retirement. While it may sound too good to be true, with the right savings and the right planning, it’s entirely possible.
We help many of our clients achieve this goal by creating a holistic Financial Treatment Plan. Some of the foundational principles of our approach include:
- Emphasizing a savings of a minimum of 15% of gross income annually during working years
- Focusing on wealth distribution as much as wealth accumulation to avoid needlessly losing money to fees and taxes
- Using each dollar multiple times to make money at lower returns, which accelerates wealth building and reduces risk
- Leveraging financial products that provide guaranteed income, such as annuities
- Protecting everything with a “wrapper” that includes maximum insurance
Much of our approach is unconventional – we purposely avoid conventional wisdom that doesn’t create an exceptional financial future. But when conventional wisdom means taking a 50% pay cut in retirement, it’s time for a new approach.
Plan Your Financial Future Today
Learn more about our approach to helping our dentist clients retire with 100% of their pre-retirement income by going to our website and checking out our book, Your Retirement Smile. No matter how far away retirement is, you can take steps now to secure your financial future and ease your transition from career to retirement.