Financial Planning For Dentists In Canada
Financial Planning for Dentists
Whether you’ve just graduated dental school or have recently retired, financial planning is a must! Of course, your needs will vary at different phases during your career, but as experienced financial planners for dentists, we can provide you with the guidance and support you need every step.
The New Graduate
You’re a new dental professional with a bright future ahead of you. If you’ve just graduated, you may feel overwhelmed about getting started with financial planning. We can get you on track for success by ensuring you’ve got financial clarity around:
- Debt management includes paying down your loans
- Cash flow management
- Make sure you have the proper insurance in place, including health and disability
- Saving for your first home
- Start putting a little bit away inside an RRSP
- Start planning for the future purchase of a dental practice
New Dental Practice Owner
Now that you’ve established your dental practice, you need to consider the use of a corporation for legal and tax protection. With a corporation comes different tax strategies to minimize taxes, including income splitting, paying out dividends vs salary and managing cash flow for the future. Your financial plan will address:
- Cash flow management, including debt and financing
- Integrated tax planning strategies that include your personal and business finances.
- Creditor proofing of assets
- Investing in your children’s RESP, your RRSP and TFSA
- Planning for future purchases, including bigger home, dental practice and investment property.
- Insurance review including health, disability, critical illness and life.
- Estate planning, including your Will
Mid-Career Established Dentist
You’re well established in your practice at this stage of your career. You may have a group of dentists working together and sharing resources to help each other succeed. If you’re at this stage, you should be focused on managing the finances of your practice and family. This includes:
- How money is being spent, saved, and paying down debt
- Managing increasing expenses for children’s education, taxes, and costs related to your practice
- Reviewing your investments to optimize tax efficiency and minimize fees
- Review your insurance coverage, including disability, critical illness, and life insurance, to make sure it continues to meet your needs as they change over time.
- Updating your estate plan
Practice Selling Dentist
You’ve worked hard and are now ready to sell your practice. This brings a new set of financial challenges, including building an exit strategy from your practice and changing your focus from growth to income generation.
As you’ve grown older, your priorities have shifted, and your financial plan should reflect this. It’s important to consider:
- Integrated tax planning that considers your practice and personal finances, including accessing lifetime capital gains exemption.
- Retirement income planning.
- Financial assistance for adult children if necessary and duration of contribution.
- Reviewing the need for permanent insurance for estate planning needs.
The Retired Dentist
Now that you’re retired, your financial planning needs to focus on ensuring a steady cash flow and determining what legacy you want to leave. Your other financial priorities will include:
- Retirement cash flow
- Tax minimization
- Estate planning
- Healthcare for old age and out-of-country travel