Short answer: retirement flips your whole financial life — for decades you built a portfolio, and now you have to turn it into a reliable paycheck that lasts. That’s a different, harder skill than saving, involving which accounts to draw from, in what order, how much is safe to spend, and how to manage taxes and markets along the way. Getting it right is what makes savings actually feel like security.
Why is retirement income so different from saving?
For your whole career the job was simple: earn, save, invest, repeat. In retirement it inverts — no more paycheck, and the portfolio you built now has to generate one that lasts 20 to 30 years, through good markets and bad. There’s no “redo,” which is why the transition from saver to spender trips up even disciplined, high-income dentists.
How much can you safely spend?
A common starting point is the “4% guideline” — withdrawing roughly 4% of your portfolio in year one and adjusting for inflation thereafter — as a rough test of whether your savings support your lifestyle (how much you need to retire). But it’s a guideline, not a guarantee: your real safe rate depends on your time horizon, flexibility, market conditions at the start, and other income like Social Security.
Which accounts should you draw from first?
How do you protect against bad markets?
The biggest danger early in retirement is “sequence risk” — a market drop in your first years, when you’re withdrawing, can do lasting damage. A common defense is a cash-and-bond buffer you spend from during downturns, so you’re not forced to sell stocks at a loss to fund living expenses. That’s a core reason bonds have a role in retirement even for growth-minded investors.
How does a practice sale fit in?
For many dentists, practice-sale proceeds are a big part of the retirement paycheck. That raises the stakes on turning a lump sum into durable income — and on coordinating the sale’s timing and taxes with the drawdown plan. Building the paycheck should start before you sell, not after.
Frequently asked questions
Build a withdrawal strategy: decide a sustainable spending rate (the 4% guideline is a starting point), determine which accounts to draw from and in what order for tax efficiency, keep a cash/bond buffer to avoid selling stocks in downturns, and coordinate with Social Security and any practice-sale proceeds. It’s an ongoing, year-by-year plan, not a one-time calculation.
The “4% rule” — withdrawing about 4% of your portfolio the first year and adjusting for inflation — is a common starting guideline, but not a guarantee. Your safe rate depends on your time horizon, spending flexibility, market conditions when you start, and other income. Many retirees adjust spending dynamically rather than following a fixed rule.
Sources
Founder & Financial Planner · Investment Adviser Representative · Series 63 & 65
Ian McGinnis is the founder of Dental Wealth Partners and a fee-only financial planner dedicated to dentists. As an investment adviser representative (Series 63 and 65), he built the firm to give dentists coordinated, fiduciary advice across their practice, taxes, investments, retirement plans, and long-term goals — the whole picture in one strategy. A graduate of Belhaven University, Ian previously worked at Davis Private Wealth, MML Investors Services, and Northwestern Mutual, and is based in the Jackson, Mississippi area. He is the author of The Wealthy Dentist and hosts the Smiles & Cents podcast.
Keep reading
- Retirement withdrawal strategy: which accounts to tap, and whenThe order you withdraw from taxable, tax-deferred, and Roth accounts can save years of taxes. Why your withdrawals look different before and after Social Security.
- The role of bonds in retirement: playing not to loseBonds won’t make you rich, but in retirement they do a different, vital job: stability and safe money to spend so you’re not forced to sell stocks in a downturn.
- How much money does a dentist need to retire?Your retirement number depends on spending, not income. Here’s the 25× rule, a simple table, and why dentists tend to retire later.