Financial planning: Living versus working and retiring

June 25, 2015
In his best-selling book, "The New Retirementality," author Mitch Anthony deconstructs modern-day views of retirement.

Brian Hufford, CPA, CFP

In his best-selling book, "The New Retirementality," author Mitch Anthony deconstructs modern-day views of retirement. I could wallpaper my office with the compelling quotes from this book. One I particularly like describes the dehumanizing and commonly held view that defines two phases of life: "binging on work (career), or binging on leisure (retirement)." Neither seems aligned with a compelling life's purpose.

In terms of living life intentionally, the author quotes financial planner Elizabeth Jetton, who asks, "What is the most important piece of a jigsaw puzzle?" Most people say the corner piece. Actually, Jetton says, "The most important piece is the picture on the cover of the box. If you don't know what the picture is, you're just moving pieces." A dentist who has a compelling hope to retire earlier than normal seems to be indulging a desperate desire to escape from drudgery (moving pieces) rather than living a passionately connected life that consists of vocation, creativity, and leisure.

I've come to view the major career challenges in dentistry as similar to the challenges faced by professional athletes-outsized career satisfaction and financial rewards in a physically limited period of time. How does Peyton Manning stay connected to football when he can no longer be the quarterback at an elite level? How does he replace his huge income from playing football when he's physically limited at a young age? Dentists face the same physical challenges of connection with vocation and income replacement, though to a lesser degree. Professional athletes have an advantage, however. In addition to honing and maintaining an elite skill level, they are sensitive to the need to plan for when they can no longer play, both vocationally and financially. Following are dental-specific questions related to my view of the new retirement mentality.

1. If there are three stages of a dental career-Developmental, Growth, and Transition-how do you maximize career success in each stage? During the Developmental and Growth stages of a dental career, binging on work is encouraged by poor financial habits. During the Developmental stage, there is binging on debt repayment: student loans and practice debt. There needs to be a plan that allows significant savings to occur in addition to debt repayment. During the Growth stage, binging on work is encouraged by expenditures for children and always paying cash for equipment along with poor tax planning. During the Transition phase, the biggest challenge is assuring that income needs post-dental career have been addressed, along with a plan to stay engaged with life.

2. Are you managing the career risks of a loss of working income? Similar to my metaphor comparing dentists to professional athletes, each dentist should carefully plan for a potential loss of income due to career-interrupting or career-ending physical limitations. During the early and middle stages of a dental career this means having a six-month cash reserve, managing debt with enlightened strategies, and maintaining maximum overhead and disability insurance. It also means always saving 20% of working income each and every year throughout a career.

3. How do I plan to align the jigsaw puzzle pieces with the image on the box? The most successful dentists I am privileged to know seem to have an extra capacity for leadership associated with the delivery of clinical excellence and management of financial excellence. It seems that they display this leadership through lifetime learning, staying connected to the profession, and always having the end in mind. The puzzle pieces have only one purpose, to form the picture on the box. Dentists who have a weak vision of that picture on the box seem to become overwhelmed by the complexity of the puzzle pieces: unmotivated staff, difficult patients, and financial complexity. Leaders learn strategies: finding the corner pieces, sorting the border pieces, and aligning the colors with the picture to finish the puzzle.

Finally, plan to abolish the view that permanent leisure (retirement) is a compelling vision of life. Plan to grow satisfaction throughout life with a larger purpose for your life and re-energizing leisure.

Brian Hufford, CPA, CFP, is a wealth advisor and dental practice thought leader with Buckingham, a national, independent wealth and financial advisory firm. Buckingham is part of the Bam Alliance, a community of more than 140 independent firms across the United States. Part of Buckingham's specialty is in helping dentists achieve their most important goals. To connect with a Buckingham advisor who specializes in working with dentists, visit, email [email protected] or call (888) 470-3064.

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