The right practice retirement plan can shelter far more than a basic setup and reward the people who help you build. Here’s how the main options compare and how owners choose among them.
What retirement plans can a dental practice offer?
The common options range from simple to sophisticated: SEP-IRA, SIMPLE IRA, 401(k), 401(k) with safe harbor and profit sharing, and a cash balance plan layered on top. Each balances contribution potential, cost, complexity, and staff impact differently.
| Plan | Good fit for | Notes |
|---|---|---|
| SEP-IRA | Solo or very small practices | Simple; owner and staff get the same contribution rate |
| 401(k) + safe harbor | Practices with staff, moderate savings goals | Lets owners max deferrals; predictable staff cost |
| 401(k) + profit sharing | Owners wanting to save more, reward key staff | Flexible allocation within IRS rules |
| Cash balance (paired) | High-income owners maxing the 401(k) | Much higher limits; required contributions |
How do you choose the right plan?
Start with how much you want to save and defer, then weigh the cost of the staff contributions each design requires. Owners who simply want to max personal deferrals often use a safe-harbor 401(k); those who want to shelter far more add profit sharing and a cash balance plan. The right answer is modeled, not assumed.
Frequently asked questions
There isn’t one best plan — it depends on your income, team, and savings goals. Many owners use a safe-harbor 401(k) with profit sharing; high savers add a cash balance plan. Model the options for your situation.
Plans must follow IRS nondiscrimination rules, so staff generally receive contributions. Thoughtful design can still tilt benefits toward owners within those rules — a key reason to model designs.
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
- Cash balance plans for dentists, explainedHow high-income dental practice owners can use a cash balance plan to shelter more than a 401(k) allows — and how to tell whether it fits.
- Tax planning strategies for dental practice ownersProactive, year-round tax strategies for dental practice owners — entity choice, retirement plans, income timing, and coordinating with your CPA.