Choosing which retirement plan to offer the employees in your dental practice is a major decision, but not one that is without options. From traditional 401 (k)s, 401 (k)s with profit-sharing, SEP IRAs, and SIMPLE IRAs, you may find yourself wondering which plan will is right for you and your staff. After all, the right retirement plan can:
- Help you save the most for your own retirement as the dentist owner.
- Provide valuable tax savings for the practice.
- Retain key employees.
- Attract more qualified hires.
The following provides an overview of the most popular retirement plans used by dental professionals and how each impacts the monetary and management aspects of the practice.
Traditional 401 (K)s
The traditional 401 (k) is the most commonly known type of qualified workplace retirement plan. These plans allow employees to contribute a portion of their pre-taxed income to individual retirement accounts and possibly even receive an employer match up to a certain percentage. The employee elects how much of his or her paycheck to contribute each pay period and the funds are transferred through automatic payroll deduction.