The Freedom Paradox: When Is the Right Time for a Dental Practice Owner to Retire?
For many dental practice owners, retirement is less a single decision and more a complex equation, one that blends financial realities, personal readiness, and long-term cash-flow certainty. While most practice owners are highly skilled clinicians, few have had the time or tools to step back and objectively answer three critical questions:
When is the best time to retire financially?
Am I truly ready to let go emotionally?
And what will my after-tax cash flow actually look like
for the rest of my life once I do?
The Financial Timing Question: “When Is the Best Time to Retire?”
From a financial perspective, the “right” time to retire is rarely obvious. It depends on a wide range of variables that must be evaluated together, not in isolation. These include the current and future value of your dental practice, what it would realistically sell for today versus three or five years from now, and whether you own dental real estate that could also be sold or retained for income.
Other key factors include the amount and structure of your retirement savings, any additional assets you plan to sell before or during retirement, outstanding liabilities, and your current age. Mandatory milestones such as Social Security eligibility, required minimum distributions (RMDs) from retirement accounts, and shifting tax brackets, can materially impact outcomes. Without integrating all of these factors into a unified analysis, retirement timing decisions are often based on assumptions rather than clarity.
Emotional Readiness: The Often-Overlooked Variable
While financial readiness can be modeled, emotional readiness cannot be ignored. For many owners, their identity, routine, and sense of purpose are deeply tied to their practice. Letting go requires preparation, both mentally and practically. Although this factor alone may not drive the retirement decision, it can influence when an owner feels comfortable executing a plan that is otherwise financially sound.
Understanding After-Tax Cash Flow in Retirement
Perhaps the most important and least understood question is this: What will my after-tax cash flow look like every year after I retire? Even owners who believe they have “enough” saved often lack visibility into how different retirement dates, sale values, tax treatments, and income sources interact over time.
The most effective approach is comprehensive retirement modeling. This involves building multiple scenarios, often a practice owner’s top three retirement models, such as retiring this year, in three years, or in five years, each with different assumptions for practice and dental real estate sale prices. These models allow owners to see projected after-tax cash flow annually for the remainder of their lives, giving practice owners greater confidence about their futures.
An Invitation: The Freedom Paradox
You are invited to be our guest for upcoming evening presentations, discussions, and dinners in Columbus and other Ohio communities, titled “The Freedom Paradox.” These gatherings focus on financial timing of retirement, realistic after-tax cash-flow modeling, and personal considerations that influence one of the most important decisions of a practice owner’s life.
To learn about the Thursday evening March 4th Freedom Paradox event in Columbus and gatherings in other Ohio communities, click the “Freedom Paradox Information” button below and type in “FREEDOM PARADOX” in your message.
Take control of your future
PVA℠ helps practice owners prepare for the inevitable transition of their practices to new ownership.
J. Robert “Bob” Brooks, CEPA, CBI
J. Robert “Bob” Brooks, CEPA, CBI, leads Practice Endeavors, an Ohio-based practice brokerage and dental realty company. His company provides practice owners with the tools they need to prepare well for life after practice ownership and to find the best price/best fit buyers for their seller clients. Bob was integral in starting the first of its kind dental practice broker credentialing for the International Business Brokers Association.