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Selling your practice at retirement. Are there problems ahead?

T Beazoglou¹, H Bailit, L J Brown

¹Department of Pediatric Dentistry, School of Dental Medicine, University of Connecticut Health Center, 263 Farmington Ave., Farmington, Conn. 06030-1610, USA.

Journal of the American Dental Association (1939)

|January 6, 2001

Summary

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The number of retiring dentists will exceed new graduates in the next 20 years, potentially lowering dental practice values. Dentists should plan retirement savings carefully, considering practice sale dependence.

Area of Science:

Dental workforce demographics
Economic impact on dental practices

Background:

The dental workforce is aging, with fewer new dentists entering the field.
This study examines the impact of demographic trends on dental practice value and retirement income.

Purpose of the Study:

To determine if demographic trends will decrease dental practice value.
To assess the importance of practice sales for dentists' retirement income.

Main Methods:

Projected dentist retirement numbers using age 62 as retirement.
Estimated new dentist graduates based on enrollment trends.
Analyzed retirement savings data from the ADA's 1995 Survey of Current Issues in Dentistry.

Main Results:

Retirement rates (2.1%) are projected to be more than double graduation rates (1%) between 2001-2020.

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Dental practice value constitutes over 40% of reported retirement savings.

Most dentists do not rely on practice sales for retirement financing.

Conclusions:

An increasing number of dentist retirees compared to new graduates will likely reduce dental practice values over the next two decades.
Dentists must meticulously plan retirement savings, considering their target savings, retirement timing, and reliance on practice sales.