VIDEO: The dentist's retirement number explained in 7 minutes

A major financial question on dentists’ minds is, “How much will I need to save to retire at the level of spending I’m used to?” Is it $2 million? $5 million? $1 million?

Doug Carlsen, DDS, often hears from dentists that they need “$5 million to retire.” His follow-up question, “Is that $5 million in today’s dollars or in future inflated dollars?” According to Carlsen, 100% of the time the answer is, “I don’t know.”

Carlsen says that financial professionals throw out retirement numbers like Halloween candy: often and indiscriminately, normally with no personal research or mathematical reasoning. And rarely do they differentiate between current and future dollars with any accuracy.

The 70% to 80% of pre-retirement income need for retirees, touted in the media, doesn’t normally apply to small business owners and Carlsen shows why.

In the video below, Carlsen offers a sound way to approximate your retirement number using simple rules and reasoning. The exercise involves an average dentist netting $250,000 per year, yet can be adapted to those earning more or less.

A key factor in finding your number is figuring what your annual spending will be in retirement. Unfortunately, there are no software programs available online that provide accuracy for this simple calculation. In the video below, Carlsen shows you a method to find this key number.

Carlsen has written over 55 national financial articles for dentists in the last eight years, taken from the perspective of one that was able to retire at age 53 in 2004. He will now provide weekly financial articles with videos for the dental community through Dental Products Report and Dental Practice Management. He also now writes for a physician blog, The White Coat Investor. His methods follow those of Warren Buffet, John Bogle, Larry Swedroe, and others that follow academic research rather than sales and trader information touted on CNBC and radio salesmen. Carlsen does not invest doctor’s money or sell any products.

To have Carlsen speak to your group, please contact him at

Editor’s Note: Photo used in article is “Sunset Borocay White Beach”. Licensed under Public domain via Wikimedia Commons