28 Mar 2018  •  HR & Employment Law  •  4min read By  • John Clarke

The dos and don’ts of retirement planning

Time-consuming administration, challenging NHS contracts and record practice values have led to an increasing number of dentists looking to retire early, typically between the ages of 50 and 55. Many dentists have an idea of what they would like to do after they finish work but often the hardest decision is the timing of retirement and understanding when they can afford to do so.

If you’re tempted by the prospect of putting your feet up sooner rather than later, it’s important to consider the following factors to enjoy a successful and prosperous retirement.

Create a long-term retirement plan                                                                 

It’s very hard for a busy dentist, with all the pressures that come with the job, to free up time to frequently review their plans for retirement. But equally it’s difficult to determine the best course of action for your business and your personal finances unless you create a long-term plan for your future.

Ask yourself the following questions:

  • How much money will I need to save each month?
  • How much money will I need to retire on?
  • Should I stay on as an associate at my practice after selling it?
Seek financial advice and support from trusted providers                        

Given the amount of publicity that has surrounded NHS dentistry and pensions in recent years, there is an assumption that dentists will begin to plan earlier for retirement. The reality is somewhat different with insight suggesting that dentists are still uncertain about what action to take.

Research compiled by specialist financial mutual Wesleyan has revealed that dentists are still confused by pensions, with over three-quarters (78%) not understanding their key features or how much to save each month. How much money you need in retirement will depend on your own circumstances and needs, but it’s important to review your finances frequently so you can make effective plans to achieve your long-term goals.

Fortunately, dentists do have access to knowledgeable, credible and expert advice from trusted financial providers to enable them to get their retirement plans in good health. Face-to-face meetings are a service offered by Wesleyan Financial Consultants, who are trained to understand the specifics of dentists’ pay, benefits, and career paths. Advice is offered on a no-obligation basis.

Invest in your practice                                                                       

Irrespective of whether you are looking to retire imminently or not, investing in your practice will increase its value, ensure you retain existing patients and attract new ones whilst making it more attractive to prospective buyers when you eventually come to sell. According to the latest Practice Goodwill Survey released by The National Association of Specialist Dental Accountants and Lawyers (NASDAL), ‘the practice sales market continues to achieve record highs and shows no signs of changing – in the short-term at least’.

NASDAL’s latest published figures in January 2018, which relate to the quarter ending 31 October 2017, highlight that practice valuations achieved an average goodwill value of 153% of gross fees – up from 146% in the previous quarter. Investing in new technology and specialist equipment will support your practice to stay ahead of your competitors, increase efficiency and drive growth through offering additional services and treatments which patients are prepared to pay extra for.

Tailored and flexible finance solutions offer funding for a wide range of dental technology and equipment, including software and associated hardware and services. As a result, dental practices no longer have to dip into vital cash reserves and attempt to purchase new items in one lump sum. Instead, asset finance from alternative finance providers such as Wesleyan Bank, allow dentists to spread the cost (usually over one to five years) so they can protect essential working capital in their practice, without compromising their existing banking lines.

Planning to retire early comes with risks and rewards. Choosing the right financial partner with specialist knowledge of the dental sector can determine whether a dentist is able to enjoy a comfortable retirement with financial stability or makes a misinformed decision that they may ultimately regret.

Author – John Clarke

John ClarkeJohn Clarke is Head of Business Development at Wesleyan Bank. John has amassed 18 years’ experience in the finance industry and has deep domain expertise in the professions, specifically within the dental and legal sectors. He has recently played a key role in several multi-million-pound dental acquisition transactions.


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