You owe your patients a standard of care -- You owe yourself a standard of living

April 10, 2014
Smart dentists, young and old, automatically divert a certain percentage of their income into savings each month. The percentage should be determined by the wants and needs of each dentist.

By Roger P. Levin, DDS

Dentists are extremely dedicated to their patients. They attend a significant number of continuing education courses in order to maintain the highest level of skills. As a result, the patients' standard of care is never neglected. Unfortunately, in this post-recession economy, the doctor's standard of living does not fare nearly as well.

In fact, many dentists today face a disheartening situation. In each of the last four years, 75% of dental practices have experienced production declines. Given that the average age of a retiring dentist is now 68.3 years, dentists are working longer than ever before. I believe that in as little as five years this average may increase to 70 to 72 years of age. With their income down, doctors are seeing their lifestyles and their ability to pay bills seriously impacted.

These circumstances represent the harsh reality of the new dental economy. It has forced dentists to fundamentally change how they manage their businesses -- perhaps the most difficult task they could ever be asked to do. As a third-generation dentist, I understand the situation only too well. Although dentists are highly trained professionals, they have little or no business management education, which makes them highly vulnerable in this economy. CEOs in other fields have extensive business experience to draw upon as they revamp their companies in this economy. Unfortunately, most dentists are unprepared for the task they must accomplish.

To grow their practices in a challenging economy, dentists should consider the following steps:

1. Concentrate on your best investment, your practice

Dentists make their living from their dental practice. I have met very few doctors who have significant income from outside sources other than their investments and the dental practice. Unless dentists have a trust fund or a large inheritance, they are unlikely to have considerable revenue generated outside of the practice.

Keep in mind that the one thing dentists know well is their dental practice. They are well-trained experts who provide a service that people genuinely need. To protect themselves in a difficult economy, dentists should:

  • Focus on increasing practice production -- Replace outdated practice systems to create a more efficient, more productive practice. The better the office performs, the more the doctor's income will increase. Some of this can then be used to invest further, creating passive income that increases the net worth of the doctor.
  • Avoid high-level investments outside of the dental practice -- Most dentists who make significant investments outside the practice end up regretting it. Unfortunately, they often do not have enough knowledge to determine whether something is a good investment. Investors in other fields take calculated risks because they have enough capital to survive the occasional bad investment. Dentists are not in such a position. When they wind up losing $50,000, $100,000, $200,000 or more, dentists are forced to reset their financial plans, which means practicing many extra years to make up the difference.

2. Prioritize financial planning

Every dentist should have a financial plan created by a fee-only, expert financial planner who understands the unique circumstances encountered by dentists. This process enables doctors to know exactly where they are currently, and approximately where they will be every year of their lives until they reach financial independence.

In the course of presenting so many seminars over the years, I have asked thousands of dentists if they could give me the exact age they are going to retire and the amount of savings they will need to retire comfortably. They rarely, if ever, have answers. Every doctor should know exactly when he or she will be able to retire and precisely how much money will be needed to do so.

Financial planning should never be considered optional. Simply rolling along in life and leaving the future to "fate" often proves disastrous. At certain points in life, dentists may want to consider retirement, cut back on hours, or deal with family and health issues. Pursuing any of these options will be difficult if the dentist is not in the right financial position.

3. Save more

Without question, dentists need to save more money -- particularly in this economy. Despite the fact that the average annual net income for a general dentist is $193,640 per year, dentists are like most people when it comes to savings. We are saving less than our parents and grandparents and have higher expectations of how to live and what should be purchased. The problem is that funding the lifestyle that we want to have today may compromise the lifestyle we hope to have tomorrow.

Smart dentists, young and old, automatically divert a certain percentage of their income into savings each month. The percentage should be determined by the wants and needs of each dentist. If a doctor wants to have a better lifestyle earlier, then the practice must generate more revenue for the doctor to achieve this objective. Spending more as a percentage of income to have a desired lifestyle will ultimately result in a dentist who ends up working 10 years longer, has much less retirement funding than desired, or is not prepared for any life event that might occur that requires extra funds.

4. Save early

The earlier dentists start saving, the faster their net worth will grow. While this may not seem important for a dentist in his or her 30s, it is actually critical. Too often, young dentists overspend in their early years, only to find themselves struggling 10 to 15 years down the road. They fail to realize that saving allows them to take advantage of financial growth factors such as compound interest. Whether investment markets are returning at high or low levels, compound interest is a critical component for accumulating wealth. I regularly encounter young dentists with extensive student loan debt who either have no ability to save or no desire to save. These doctors are only setting themselves up for difficulty later in their lives.

Dentists should set up retirement funding as early as possible and monitor lifestyle investments from the outset in order to maintain a lifestyle that allows for savings. The alternative to saving early is spending most of your middle-age years desperately trying to catch up to where you should be.


Dentists spend their careers working very hard to provide an excellent standard of care for patients. They are dedicated and focused, and enjoy investing a great deal of time and money in continuing education. Unfortunately, they often do not invest the same amount of time and effort into creating a standard of living for themselves and their families, not just for now but also for the future.

The standard of living for dentists is currently diminishing because 75% of practices have declined in production in recent years. While the entire profession may not necessarily bounce back to its pre-2009 levels, any practice can grow significantly and allow the doctor to reach financial independence at a reasonable age while enjoying an excellent standard of living along the way.

References available upon request.

To learn more about running a highly efficient and successful practice, come to Dr. Levin's upcoming seminar "The New Rules of Increasing Practice Production." Pick a seminar location that fits your schedule at

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