I retired from the private practice of dentistry Aug. 1, 1991. I had no intention of practicing again once I was hired to take the reins at Professional Insurance Exchange Mutual Inc. (PIE), a malpractice insurance company for Utah dentists. I did maintain my dental license and teaching position at the University of Utah. I wrapped up major AGD involvement back in 2005 as chair of the Credentials & Elections Committee. After 30 years at the helm of PIE, I finally retired from full-time work Oct. 16, 2020, and have enjoyed my retirement so far, although I still consult for PIE one day a week. 

What has enabled me to enjoy retirement after more than a year, and what words of wisdom can I leave with AGD members committed to education and quality-based dentistry? One word epitomizes what you must do if you desire to have financial security in your future, whether you still practice as a self-employed dentist or as a member of a corporate or large group practice. That word is “discipline.” 

Retirement Scenarios I’ve Seen 

Dentistry can be a means to an end, but, for some, it is the end because they love dental practice and don’t want to stop. I have known several dentists who kept practicing well into their 80s, not because they couldn’t afford to retire but because they didn’t want to. But I have also known a few others who did want to retire but had no retirement money set aside and had no choice but to continue practicing. 

I know one dentist who had a goal to retire at age 55. He did what he had to do to save financially and was able to retire at that age, only to die five years later at age 60. I have seen others who set a goal to retire at a certain age, were careful to set money aside, sold their practices and enjoyed their retirement, keeping busy with travel, church and humanitarian service, and other pursuits for many years. 

Other dentists lost what retirement money they had worked hard to save by being taken advantage of by people who gained their confidence and scammed them in the form of investments — often in real estate or other ventures with unrealistic promises of a high return. Three of the five healthcare professionals in the building where I practiced during the 1980s lost money to one of the well-known scams that plagued Utah dentists during that time. 

The scammer knew many dentists through an equipment leasing company he was involved with, and he started real estate ventures with a partner. He and salesmen working under him told the unsuspecting dentists that the company was simply trying to build “a line of credit” and had them sign paperwork for what they thought was money they were investing with the scammer’s company — for large expected returns. However, they were actually signing second mortgage documents pertaining to their homes. When rising interest rates forced the scammer to go bankrupt, the banks started to call in the mortgages, and the dentists had to hire lawyers to extricate themselves from the mess. Unfortunately, many of the dentists affected by this scam had to work a lot longer and pay a big price for their gullibility and the money they lost. 

Other dentists have done well, but they and/or their spouses spent too much money too fast in their best earning years on expensive cars, jewelry, clothes and homes and did not set enough aside for retirement. Now, of course, most new graduates are in a large hole when it comes to student loan debt, particularly if they buy a nice home and practice early on. But the younger a dentist is when they start setting money aside for retirement, the better. The key is discipline. 

Strategies to Save 

When I was practicing dentistry, if I needed some extra money to buy a nice Christmas present for my wife, rather than spending outside my budget, I worked an extra hour one day a week. Then it was easy to be able to buy the present without going into credit card debt. Think how this could work for you as far as setting that extra money aside in a retirement account. 

Another strategy to consider is compounded income from investments. There are several legitimate financial planners who will let you call the shots and pick and manage your own portfolios. You simply have to ask around and talk to colleagues — let their recommendations guide you to planners who give good advice without exorbitant fees or mismanagement. If you follow the advice of Warren Buffett, he will tell you that many money managers should not be hired by you at all, as they make money no matter how poorly they mismanage your investments; instead, you should invest wisely and let the value increase through simple compounding.

Following is a table that shows how fast money can grow. This idea has to do with saving for a grandchild as soon as they’re born by investing $1,000 in a blue-chip, dividend-bearing stock or fund that can gain you 12% per year, such that your money doubles every six years. It is not easy these days, but it is still possible with the right stock: 
























Now, in a practical sense, what this means to readers who are young dentists is that you start by making sure you have $64,000 set aside by the time you are 36 years old. But you are not just letting that money sit by itself — instead, you are adding at least $1,000 per month if you can. That way, you are adding more shares and increasing your compounding. This way, if you have any fears of Social Security not being available when you retire, you have enough set aside regardless. Dentists often predict that they plan to retire at age 65 when surveyed by the ADA and other entities, but reality often paints a different picture. Set a retirement age goal, calculate how much money you should have set aside by the time you are that age, and work toward that goal. 

Once You Retire 

Finally, when you retire, you need a plan as far as what you are going to do with your time. For example, I have been building scale models since I was 8 years old, and I still build airplanes, cars, spacecraft, etc. and compete in contests. I recently established a scale model museum in Bountiful, Utah, with several display cases housing over 300 models — and I still have room to grow. In the same space, I have a room I use as a studio to work on watercolor paintings, which I do three days a week. I am also involved in several writing projects and play a lot of golf to stay in good physical condition (even though it often ruins a perfectly good walk). I have joined the local Rotary Club in Bountiful and do some fun things to serve my church. I am also the public member of two licensing boards with the Utah Department of Commerce’s Division of Occupational and Professional Licensing. 

Many of you have similar pursuits or may desire to use your dental skills in humanitarian efforts, which is great. Write down a plan of what you want to do when you retire so you can look forward to the day and enjoy being productive and useful. 

Now, in line with the AGD Impact Risk Management column I wrote for 10 years, I must highlight some risk factors that dentists also need to keep in mind as “Points to Ponder,” which most of you who have been reading my columns over the years are used to seeing at the end of my articles. 

Points to Ponder 

1. Many accountants, financial planners and tax attorneys will tell you that there are steps you should take to protect your nest egg in the event of a disastrous malpractice case that could lead to a verdict that exceeds your policy limits or a punitive damages claim that will not be covered by any malpractice policy as a standard policy exemption. A punitive damages claim is based on the premise that what a dentist did to a patient was so heinous or careless that financial punishment is warranted. The main outcomes that create a worrisome malpractice claim include a wrongful death claim, permanent brain damage due to anoxia during sedation or bilateral nerve damage. 
   
   
2. What steps should then be taken to protect your assets in the event of a disastrous lawsuit? The answer has to do with setting up “hedge rows” to protect your estate. These may be set up with the help of an accountant and tax attorney and involve formation of a family trust or family corporation that holds your assets so that, on paper, your personal status makes you look almost impecunious such that your estate is protected. An entire article would be necessary to describe the process, but it is important to know that such vehicles are available. Nonetheless, there are risks in this process as well that must be taken into consideration, such as family dynamics and making sure all “official” trust documents conform with state or provincial legislation and judicial codes. 
   
   
3. Some dentists may think they can protect their personal assets by selling their practices several years before retirement to a corporate dental service organization (DSO) or large group practice such that the corporation or practice will then be the party subject to malpractice litigation. In the event that there is a claim, it will be lodged against both the individual dentists involved in the alleged incident precipitating the claim as well as the corporation. You will still be required to carry an individual malpractice policy that may be provided by the corporation, but you can still be subject to an individual verdict of malpractice. Also, in some cases, you may be dismissed by the corporation before you are ready to retire and would then be faced with the challenge of having to find another place to practice that will not violate a covenant not to compete. 

In conclusion, even if you are a young dentist burdened by education-induced debt, it is not too early to be disciplined enough to formulate your own retirement plans, set financial goals, and initiate the steps to protect yourself and your family from financial disaster such that you can enjoy the ultimate fruits of your labors.

Richard C. Engar, DDS, FAGD, is retired CEO of Professional Insurance Exchange Mutual Inc., a Utah-based professional liability insurance carrier created by Utah dentists in 1978. He is also retired from the faculty of the University of Utah School of Dentistry and is the former AGD Impact Risk Management columnist. To comment on this article, email impact@agd.org.