More than 31% of solo practicing dentists today are 55 years or older. Since most dentists have traditionally retired between 60 and 69, retirement is a “hot” topic.

Future Financial Need

Goal setters who have planned for retirement since the beginning have accumulated five times what a non-planner has saved. Yet, baby boomers (now mid 60’s to 70’s) have reinvented each phase of their lives, never matching what has been customary. An ADA survey indicates dentists save 10.6% of their income which is below the federal limit of 15% contributions to a qualified pension fund.

Financial advisors think you will need from 70 to 90% of your current net income in retirement. The average dental net in 2019 was nearly $200K. In retirement planning, eighty percent of that is $160K, which is $13,350 a month. If you retire at age 60 and live another thirty years, you will need $4.8M from interest and savings.

Retirement Choices for Today’s Boomers

The figures are staggering for the slightly unprepared. What are the choices for today’s boomer dentist? Sale? Partnership? Associateship? Retire as you go? Or, will you up your game plan for 5 more years? Let’s investigate.

Sale: A sale is currently worth about 24 months of net income which is then taxed. Beware. A sale is final. You are no longer a dentist in that location. There is no going back. The book is closed.

Partnership: Partnerships in retirement have their own pros and cons. By reviewing what motivated you to enter the profession, you may find independence and freedom on your list. Selling half your practice to an unknown partner means you have surrendered your freedom and half your net income in exchange for about nine months of net income. The staff will still look to you for leadership.

Associateship: Becoming an associate after thirty years of private practice could be successful if you have the qualities to be an employee. Will you be happy doing dentistry for someone else? Do you have the qualities to be a team player under someone else’s leadership and rules?

Continue Your Own Practice by Retiring as You Go: Continuing to practice beyond the average retirement age is a viable alternative. The real advantages to keeping your own practice viable are the continued net income, ability to deduct expenses such as continuing education and a leased car, and the psychological rewards of feeling needed, serving others, and your earned status in the community.

Continuing your own practice can be done on your own terms. You can design your ideal practice days, plan your continuing education around travel adventures, and attract staff to work your schedule. You may want to work three days a week for three weeks and take the fourth week off. If you can continue to work on your own terms and have a substantial income that does not require using your retirement funds until you choose, count the advantages and your blessings.

Continue Your Own Practice by Upping Your Game: Another viable choice is to “Up Your Game” and actually make an extra $2M by increasing net in a five-year plan. This can cause a $900K increase in the eventual sale price. We have a number of very pleased retired dentists who upped their game in their 60’s. They can’t believe how much more enjoyable practice is again.

Upping your game means increasing your dental skills and your treatment offerings, installing strong systems of block booking to produce more in fewer days, solid sales conversations for an increased level of patient care, and having an accountable accomplished team marching with you. Because you have upped your skills and are focused, you can actually take more time away as you increase your net. 

Which Choice Is Right for You?

Examine your financial needs. Examine why you enjoy dental practice? Examine your options and spend time thinking about which retirement option feels most comfortable to you. We can help. Many of our clients have chosen to stay part of dentistry, and we have observed that when dentists keep up with continuing education and become skilled at working with new materials and techniques, they gain more than an enhanced income stream. They feel a rebirth and rejuvenation about their profession.

Buyers are actively seeking dental practice opportunities all over the country. With the influx of doctors to desirable areas, sellers must have a strategy for how to identify the right buyer for their legacy practice.

Navigating the Best Transition For Your Dental Practice Legacy

Complementary technical skills to properly care for a patient base are essential. Behavioral considerations like interpersonal skills and communication are part of the success of a relationship-based practice. Timing and financial considerations play a large role in buyers identifying their opportunity as well. Working with a seasoned transition consultant allows for the vetting of these necessary components.

Some practice brokers seek a transactional experience for a changing of the guard with a processing of documents and a single strategy for its completion. This is driven strictly by financial and legal considerations. That transactional mindset is what you have been working to avoid in your practice for a career. So why would you consider growing your practice or ending your career with a philosophy that goes against the grain of what your practice has become?

Curiosity Driven Dental Practice Transition Strategies

Why not become curious about practice transition strategies? You could explore a co-discovery experience of what best fits your practice model and philosophy. Asking more questions and learning more about what makes your practice a successful legacy is the first step.

Transition consultants offer a complete approach to evaluate your relationship-based practice. The approach seeks all the financial and legal considerations plus works to transfer the technical, behavioral, and business culture. The purpose of this is for continuity in your practice and security for your future built on strategic solutions. Finding a transition consultant with successful business experiences helps make them uniquely qualified to collaborate with you to develop your strategic transition or expansion solution.

Whether you are a specialist or a general dentist, seek a consultant that will perform a comprehensive exam on your practice. They should report their findings with a thorough and professional strategy to meet your wants and needs. Developing a legacy plan for your relationship-based practice model that creates opportunity and security for your next phase must be intentional.

Are you ready to discover the best strategies for you and your practice future?

Are you thinking it’s time to bring in an associate and start the process of planning a practice transition?  

Most dentists contemplate this matter at some point during their practice career but often struggle through the process and don’t know where to start. Taking the plunge is much easier once you feel more comfortable with your own perspective on dentistry.

As with all relationships, you have to work on you before you can offer something to another person. 

The Missing Link of Choosing an Associate

After many years of private practice and four associates who stayed an average of four years each (and left for “greener pastures”), I finally figured out the missing link.

This link is a clearly written and spoken practice philosophy. It is not your mission and/or vision statements (although they are important too). 

A Practice Philosophy

A practice philosophy is grounded in the 3-5 core values that describe the essence of WHO you are and WHAT you stand for. These crucial values also answer the question WHY? Why do you do what you do?  

My practice philosophy is rooted in the tenets of the Philosophy of Dentistry presented by Dr. LD Pankey. Living a life of success and happiness for Dr. Pankey meant being balanced in the areas: Work (Profession) – Love (Relationships) – Worship (Spirituality) – Play (Recreation).  

My philosophy is similar to Dr. Pankey’s, but also incorporates the values of Excellence, Integrity and Life-long learning. For me, being very clear in my principles and ideals made it much easier to evaluate and assess all potential candidates who considered joining me in my practice.   

Before embarking on the process to find the right associate/partner for your practice, ask yourself if you are clear on your core values and practice philosophy.  

Don’t miss Dr. Crete’s writing on 6-handed bonding restorations and his favorite dental material.

When a dental partnership fails, it’s natural to want to keep the truth quiet. The dissolution of relationships, especially business relationships, is often seen as shameful. In Part 1 of this series, I decided to openly discuss a partnership that ended. Here, I continue that story.

When Dental Partnerships Go Awry

After negotiation and mediation failed, our contract stated we would have our case settled by the American Arbitration Association. When the dust settled three-and-a-half years later and the final appeal ruling of the Arbitrator’s decision came down in my favor, it ended up on the front page of our local Daily Law Bulletin.  

I had multiple texts come in that morning from attorney friends and patients congratulating me on the victory. Even an arbitration victory can feel like a loss with the stomach lining and energy that it takes to go through the process.  

I know that some lessons will never be learned out of a book and need to be experienced, but please add this one phrase to your existing or upcoming contract: The loser of any appeal of binding arbitration shall pay the other party’s attorney fees. That alone would have prevented many years of stress, a whole lot of money spent on attorneys, and some gray hairs to boot.  

Creating a Partnership Charter

Recently, I was introduced to a book entitled ‘The Partnership Charter’ that has energized me around new possibilities for a partnership with my current associate. A partnership charter is a cooperative document meant to instill a spirit of collaboration into an agreement between parties.  

While not legally binding, it provides a framework for the partnership that is highly individualized and contains no boiler plate standard clauses. The process is the most important outcome and the document is secondary. It is meant to be reviewed and revised throughout the partnership, becoming a true living document that creates continued conversation over synergy and fairness.  

Though not every scenario can be planned for, I am confident that getting in and out of my next partnership will be spelled out much more clearly than my last. The charter will provide a process of collaboration that will guide us toward fairness for all concerned.

In part 1 and 2 of this candid blog series, Dr. Brad Weiss discusses the dissolution of his partnership with an associate and how he believes others can avoid falling into similar situations.

In July, I finished my term as president of my rotary club. I termed it a “planned hardship,” much like a camping trip where you know you will be better for having experienced it.

Each week for the rotary club meetings, I ended them with Rotary’s Four Way Test: First, is it the truth? Second, is it fair to all concerned? Third, will it build goodwill and better friendships? Fourth, will it be beneficial to all concerned?  

My vision of what defines a successful partnership aligns with the rotary club mindset. I believe a partnership in the dental practice is where each of the four above criteria can be met. My patients are the ultimate beneficiaries of a well-functioning agreement.  

A Broken Dental Partnership

I am not a practice transitions expert, nor did I stay at a Holiday Inn last night, but I did go to the school of hard knocks. I have been an associate, worked as an employee for a corporate entity, shared space as my own S Corp, and eventually merged my small practice with a much larger one to become a 50-50 partner with an associate as our employee.  

There is shame attached to the failure of any relationship. As my partnership split after six-and-a-half years, mine is no exception. The more I tell my story, the more I hear such similar stories from other dentists. It is eerie and disappointing to know that more is not done to improve the odds of partnership success.  

My belief is that the shame attached keeps others from knowing how to avoid potential strife between two otherwise reasonable people.

To be continued…