At What amount of $ would you retire at?

[ItsGavinC]

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Don't forget the HSA! Those tax savings are nice and you'll likely be self-employed anyways.

 

[racquetballer]

Okay so here is what you do to make some real money... Set up a SEP-IRA account and have a diversified portfolio. I would be between 50-70 percent into stocks like S+P 500 and Dow Jones 30 and the rest in long-term bonds. This should be able to get you a good interest rate of about 5-7%. The key is to start early. I would pay all my dental loans off fast that accrue at about 6-8 % before investing heavily and by heavily I mean around 30-50k per year into the SEP-IRA. You will retire with well over a million in the IRA plus whatever other investments you have and the money you'll make from goodwill when you sell your practice. What is nice about the SEP-IRA (and all IRAs) is that interest accrues tax free. Also check out 509 investments for if you have kids that need to go to college, that will accrue w/o interest too for 15yrs or so.

 

[racquetballer]

One of my hobbies is reading books about investment and financial planning😀

 

[ortho lurker]

Taking home $2.5 mil over your career is pretty generous. Let's assume you make $100k, which in this economy isn't that easy. that times about 25 yrs. of practice would make $2.5 mil. But you will have bad years where you only make $80k. Plus taxes, so it will be more like $1.5 mil at best.

This is an old post, but I want to point how people underestimate their expenses. Let's say your average after-tax take home is $100k a year throughout your career, which means you need an average net of $150k per year because the sum of all your taxes will be roughly 30% (yes you can get a good accountant and finagle a few percentage points), and therefore your practice needs to gross on average over $300k/year which is conservative, because many offices have 60-70% overhead expenses. Of that after tax $100k/year spending $, how much of it goes to housing, transportation, food, entertainment, the bills, insurances, healthcare, toys, student loans, practice loans, vacations, and kids' tuitions? My point is that you will not get to your magic number by leftover savings alone. A smarter way to achieve this goal is to diversify your investments by starting early into those retirement accounts with tax-free growth, buying investment properties, and getting $ back by downsizing your house and selling your practice in the future. It's really tempting to buy that fancy car and more house than you can afford when you get out because you overestimate your net income and think that you are entitled to it (I spent 8+ years of school so I deserve it) when everything is really driven by the market. However, if you fall behind, it will cost you years of opportunity costs for smart investing.