Dental professionals have busy lives. Obligations can include caring for patients and running their practices, as well as family responsibilities. And it can be helpful for dentists to have someone on their side to guide them to financial success. Financial advisors offer financial planning and asset management services tailored to the specific needs and goals of dentists. And some offer additional services outside of traditional financial planning. Here’s how to make the most of your relationship with a financial advisor.
How Does a Financial Advisor Help Dentists?
Some investors view their financial advisor as an expert that offers investment advice. The reality is that their expertise goes far deeper than that. Here are six common ways that financial planners provide valuable support to dentists with their goals:
Financial planning for personal and business goals. The first step towards improving your finances is working with your financial advisor to review your portfolio. Then, create a plan to maximize your retirement plan contributions. Advisors recommend portfolios to match your investment goals, risk tolerance and timeframe. Plus, they’ll discuss the pros and cons of different personal and company retirement plans.
Reducing taxes on dental practice profits. While everyone should pay their fair share of taxes, some dentists are not taking advantage of the tax deductions available to them. By working with a financial advisor and your tax professional, you can reduce your taxes. Potential strategies include maxing out your retirement plans and investing in tax credits.
Paying off student loan debt. With such rigorous educational requirements, becoming a dentist can be expensive. Many dentists take on massive student loans to cover the college of their education. Financial advisors can review your student loans to recommend options to lower their cost. You might be able to reduce your interest rate or uncover ways to pay off your loans quicker.
Financing the purchase or start of a dental practice. Whether you started your business from scratch or purchased an existing dental office, you may have a dental practice loan. Payments on those loans can significantly impact your cash flow. It is essential to evaluate your loan for cost-saving opportunities. You may qualify to lower your interest charges or monthly payment to free up cash. This extra money could fund your lifestyle, pay off debt faster, or enable you to save more for the future.
Protecting your assets with malpractice insurance. Your reputation and experience have been built over many years of hard work. One mistake could devastate you financially and end your career. Malpractice insurance is necessary coverage to protect your business and your wallet. Discuss your insurance needs with your financial advisor to discover if you can lower your premiums. Or you might be able to receive better coverage for what you’re paying currently.
Estate planning for your practice and personal assets. Your business is one of your most valuable assets. It makes sense that it should be part of your estate planning strategy. Work with your financial advisor and estate planning attorney about how to protect your legacy and heirs while minimizing estate taxes.
Bottom Line
Dentists have unique needs that other professionals may not experience. Financial advisors are trained to address these needs. Then they can develop strategies to lower taxes, save for the future, and protect your legacy. Building a strong relationship with your financial advisor ensures that these needs are covered while you focus on taking care of your clients and building your business.
Financial Planning Tips for Dentists
- A financial advisor could help dentists grow their portfolios and create family wealth. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- When saving for your future, it helps to understand what your goals are and establish a financial target. This planning provides checkpoints, so you’ll know if you’re ahead or behind on the path to your goals. Our investment calculator forecasts the growth of your portfolio based on your expected returns and the timeframe you’re investing over.
Photo credit: ©iStock/bymuratdeniz, ©iStock/ozgurdonmaz