How to Manage Your Wealth as a Dentist

As a professional field, dentists are comfortably high earners. According to the Bureau of Labor Statistics (BLS), the median a dentist can expect to earn is roughly $166,000 per year, with many earning significantly more. And, unlike the long nights of their patients in law and business, and the 18-hour shifts of their medical colleagues, dentists work an average of 35 to 40 hours per week, according to data from Indeed. While this means that most dentists are able to attain a comfortable financial situation and lifestyle, it’s still important to understand the best practices for wealth management for dentists.

If you need help putting together a financial plan, consider working with a financial advisor.

Pay Off Debt

As with any professional services provider, debt is often a critical issue. Dentists graduate with an average of $296,500 in student loans, and almost all new dentists have at least some debt. This is typically high-interest debt, as graduate school loans have much higher interest rates than undergraduate borrowing. Most graduate student loan debt carries an interest rate between 7% and 8%, meaning a new graduate can owe $23,512 per year in interest alone.

So if you hold student loans, you’ll want to clear them as quickly as possible. These loans will continue to grow and eat away at your wealth and income with every year they go unpaid.

Refinancing may also be a valuable tool when it comes to wealth management for dentists. For most borrowers, refinancing student debt can be risky, because it means giving up the protection of forbearance and deferrals. Those hardship protections attach to any loan processed through the Department of Education and can be critical if you lose your job or otherwise have a crisis.

That said, dentists may be good candidates for refinancing. Dentists have one of the highest rates of industry job security in the country, with 99.5% of licensed practitioners employed. This, coupled with the very high interest rates of graduate school debt, might make refinancing a valuable option.

Manage and Budget for Middle-Class Wealth

A woman reviews strategies for wealth management for dentists.

One of the biggest risks of a high-paying profession is the emotional feeling of wealth. For a recent graduate, it can be intoxicating to leap from school directly into a six-figure salary. And to an extent, that’s a good thing. Starting practice as a dentist is the end of an eight-year course of study, including undergraduate and graduate school. It’s good to enjoy some rewards from that hard work.

But it’s important to enjoy the rewards within reason. As a dentist is a profession that can feel richer than it really is.

Taking the median salary of $166,000 per year, it’s a comfortably upper-middle class income. But while this is a lot of money and can afford you a nice lifestyle, it’s not without limits. For context, a 2024 study from SmartAsset says that you need to earn at least $290,185 annually to be considered in the top 5% of American earners.

This is where the problems can come in. Particularly for younger dentists, it’s easy to spend this money as though you were rich. But first class travel, good dinners and nice cars will quickly exhaust a middle-class salary, even at the very top of the middle. Which is why it’s important to build a budget.

Create a household budget for your life, your debt, your savings, your retirement and your spending. This is not to say you should not live well. Again, this is, reasonably, a lot of money. But a budget will make sure that you stay within those elevated means. After all, there’s an industry of payday lenders that cater exclusively to six-figure clients, and it exists mainly for well-paid professionals who don’t have a budget.

Invest and Save

Don’t forget to put your money to work, as well.

As a dentist, you might have significant disposable income, which can be put to work in a couple of different ways.

Invest heavily in your retirement. It’s common for young professionals to pay student loans at the expense of their retirement savings. But, if at all possible, it’s a good idea to strike a balance, especially in regards to maxing out your 401(k) contribution if an employer match is on the table.
Set aside savings in addition to your retirement accounts. Just as important, make sure to invest those savings. You should be able to save quite a lot, so don’t make the mistake of holding that money in cash. A financial advisor can help you invest your savings wisely, or at least hold it in a good mutual fund or S&P 500 Index Fund.

Plan for Your Own Practice

Roughly 73% of all dentists own their own practices in whole (solo practitioners) or in part (partnerships). While this number has declined from past averages of 85% and higher, this is still an overwhelming majority.

It also requires careful planning.

Opening your own practice can be an outstanding financial move. It allows you to keep all the income your profession generates, which can enrich you in the long run. It might build long-term value, as well. Your business might be an asset that you can sell down the road, although selling a professional services practice can be difficult. (Often the value of a professional services firm, like a dentist’s office, is wrapped up in the practitioner themselves.)

However, you need significant capital to do this. Launching your own practice is cost-intensive, even if you buttress your finances with something like a small business loan. If this is something you’re considering, it would be wise to start saving sooner rather than later. You can put aside this money in a series of low-risk investments so that your capital can grow as you work toward this possibility.

Bottom Line

A financial advisor discusses wealth management with a client.

Dentists are a high-earning profession, with excellent job security and great hours. But they have a set of financial concerns all their own, ranging from debt to launching your own practice. And even with the advantages, understanding and implementing effective wealth management for dentists is important for securing long-term financial stability and success.

Wealth Management Tips

A financial advisor can help you build a comprehensive retirement plan. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Should you consider wealth management? It depends… Sometimes you need nothing more than financial advice and good savings. But sometimes, wealth management can help you really take your finances to the next level.