One of the most distressing trends I've seen in my years in this industry is the astonishing number of dentists over the age of 55 who have only saved $300,000 or less for their retirement.
Even more troubling is that it seems many of them don't realize what this means. If they continue their current lifestyle, they'll be broke within about five years of retirement, even after accounting for the sale of their practice. As great as they are at seeing the smallest things as clinicians, they are blind to this big gap looming in their futures.
We are living in a new age, and the rules have changed. People are living longer, which means more retirement years to finance, not to mention the cost of the all-but-inevitable health issues that go with that extended lifespan. People are also working longer, either out of economic necessity or because they simply are enjoying themselves too much to stop. They're feeling energetic and vital and not ready for a retirement that could last for 30 years or more.
This reality requires a new way of thinking. It isn't about work versus retirement any longer. This reality is about optimizing the things that drive your lifestyle – your time, money and relationships – in and out of the practice, for as long as you live. For instance, why not spend a few years towards the end of your career working maybe 80 days a year on the kind of cases you enjoy? But this requires starting with a smart plan.
I'm not suggesting that there is only one right way to approach retirement; however, whatever approach you take you need to know if you're on track to achieving those goals. I think I've made it clear that in many cases I recommend a transitioned approach, which means developing a practice that can support a new full-time owner, as well as you working part-time.
To do this right you need to start planning as early as possible with a strategy and specific focus for each year along the way. Begin with getting the right education and advice, then making the right re-investments, bringing in the right person, and finally modeling your gradual exit.
Generally speaking, you should start planning 10 years ahead of your final retirement date. If you've got more than 10 years to work with, even better. If you have less than that, I suggest you start the process as soon as you finish this sentence.