Financial Guidance Built for Dental Practice Owners
Dentists face unique financial challenges that require specialized expertise. Balancing patient care with business ownership means navigating complex tax structures, retirement planning, and practice valuation. Without a tailored financial strategy, dentists can risk missing key opportunities to help optimize wealth accumulation and secure their future.
At Mercer Advisors, we provide comprehensive wealth management that aligns your personal and professional goals. We started our firm 40 years ago by helping dentists. Our focus is on your success. Let’s work together on your personalized financial plan.
Why Dentists Need Specialist Financial Advisors
Dentists juggle the demands of patient care and business ownership, making financial planning very complex. Without specialized guidance, they risk inefficient tax strategies, undervalued practice transitions, and insufficient retirement savings.
According to the American Dental Association, the percentage of working U.S. dentists over age 65 has nearly doubled in the past two decades. Rising retirement ages highlight the need for long-term planning, especially as dental practices often represent a dentist’s largest financial asset.
At Mercer Advisors, we provide tailored strategies for tax optimization, practice valuation, and wealth management, working to help ensure dental professionals can maximize their earnings, secure their future, and transition smoothly into retirement with confidence.
Tax Strategies for Dentists
Selling a dental practice can trigger substantial tax liabilities, but strategic planning can help minimize exposure and optimize financial outcomes. One of the primary concerns is capital gains tax, which applies to the profit earned from the sale. Structuring the transaction thoughtfully, whether through installment sales, asset allocation strategies, or leveraging tax exemptions, can help reduce the taxable portion of the proceeds.
Asset structuring also plays a crucial role in tax efficiency. Using trusts and legal entities, such as family limited partnerships, allows dentists to manage wealth transfers, can minimize estate tax implications, and protect assets. Proper structuring helps ensure tax optimization while maintaining flexibility for future financial decisions.
Working with experienced tax professionals, including CPAs and financial advisors, is key to navigating deductions and exemptions effectively. Their guidance ensures compliance while identifying opportunities to help reduce tax burdens through personalized strategies tailored to the unique financial circumstances of dental professionals. By combining these approaches, dentists can secure a financially sound transition while preserving wealth for the future.
Specialized Services for Dentists
- Integrated personal and professional financial planning
- Cash flow planning and liquidity management
- Tax strategy optimization, especially post-sale
- Debt reduction strategies to manage student loans and/or financing
- Retirement plan design for your practice and staff
- Risk mitigation advisory to help protect your practice and personal assets
- Access to practice valuation services
- Succession planning guidance
Mercer Advisors is not a law firm and does not provide legal advice to clients. All estate planning documentation preparation and other legal advice is provided through select third parties unaffiliated to Mercer Advisors, depending on the complexity of the estate, additional fees may apply. Tax preparation and tax filing services typically requires a separate fee from our investment management and planning services.
Long-Term Wealth Management:
Guiding Dentists Toward Economic Freedom™ in Retirement
Transitioning from dental practice ownership to retirement is a significant milestone—one that requires a thoughtful and customized financial plan to help ensure lasting stability and flexibility. Our wealth management strategies help empower dentists to replace their practice income, preserve assets, and safeguard their legacy with confidence.
Key areas of focus include:
Cash Flow Management
A structured distribution plan helps ensure steady, reliable income post-sale, supporting both everyday expenses and long-term financial security, so that you can retire with more confidence.
Risk Management and Income Planning
We help you plan for unexpected scenarios like early retirement or practice-limiting injuries so that you can have a reliable source of steady income, regardless of your circumstances.
Estate Structuring
Thoughtful estate planning, trusts, and legacy strategies designed to provide financial continuity for loved ones.
Investment Diversification
A balanced approach to asset management that helps optimize growth, manages risk, and maintains liquidity, preserving your financial security well beyond practice ownership.Additional Solutions
Selling a dental practice or stepping back from clinical work opens the door to new opportunities—but also complex financial decisions. These solutions help simplify your transition, reduce your tax burden, and support your long-term goals.
Practice Transition Checklist
Selling your practice or stepping into retirement is a major milestone—but it requires careful planning. This checklist highlights the key financial, tax, and legal steps every dentist should take to help protect their life’s work and ensure long-term financial security.
FAQs for Dentists Nearing Retirement
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Selling a dental practice is a major financial and personal transition that requires careful planning. Whether you’re retiring after decades of patient care, passing ownership to a successor, or exploring new opportunities, structuring the sale properly can maximize value and minimize tax burdens.
Key factors like practice valuation, patient retention, and post-sale income planning impact your financial future. Working with a specialized advisor can help ensure you navigate legal, tax, and investment considerations while preparing a smooth transition for both you and your patients.
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On average, dental practices sell for 60–80% of annual revenue, with factors like equipment, office aesthetics, financial stability, location, staff dynamics, and patient inflow influencing price.
Maximizing your practice’s value starts with a long-term exit strategy, ideally beginning 5–10 years before retirement. A valuation provides insight into current worth, helps identify ways to enhance value before selling, and accounts for economic trends like interest rates and inflation, which affect buyer financing.
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The taxes you’ll pay when selling your business depend on factors like capital gains rates, tax legislation, and asset structuring. Planning early with a specialized advisor to enact specific strategies can help ensure optimized tax efficiency.
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A well-planned transition helps ensure continuity for employees and patient care. The clearer your exit strategy is, the more confident you and everyone one involved can be in your transition, and what follows. The most successful dentist retirements we typically see are the ones that begin this process well in advance, ideally 5-10 years before your intended exit.
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Options like IRAs and taxable investment accounts allow for continued wealth growth potential post-sale.
